Central Securities Clearing System Plc (CSCS) has welcomed FTSE Russell’s decision to proceed with Nigeria’s reclassification from Unclassified to Frontier Market status, effective from the opening of trading on September 21, 2026.
CSCS disclosed the development in a statement issued on Thursday, August 27, 2026, saying the decision reinforces confidence in Nigeria’s T+1 settlement framework and reflects continued progress in the country’s capital market reforms.
The clearing house said the reclassification marks an important milestone for Nigeria’s capital market and reflects reforms aimed at improving market efficiency, resilience and alignment with evolving global standards.
According to CSCS, the review provided Nigerian capital market stakeholders with an opportunity to demonstrate that the transition to T+1 settlement can operate effectively for both domestic and international investors while preserving the fundamental protections provided under the market’s Delivery versus Payment (DvP) settlement framework.
CSCS stated that Nigeria transitioned from T+2 to T+1 settlement on June 1, 2026, as part of a broader programme to modernise the post-trade environment, reduce settlement exposure and strengthen the competitiveness of the Nigerian capital market.
The transition, however, raised questions about whether international institutional investors would be able to meet the shortened settlement timeline. Concerns were also raised over whether the new cycle could effectively require foreign portfolio investors to prefund their transactions.
CSCS said continued engagement among the Securities and Exchange Commission (SEC), CSCS, market operators, custodians and other stakeholders clarified that foreign portfolio investors are not subject to a mandatory prefunding requirement.
FTSE Russell had in June 2026 halted its planned reclassification of Nigeria back to Frontier Market status and placed the country under further review to assess the impact of the T+1 settlement cycle on international institutional investors.
The index provider had expressed concerns that the shorter settlement period could effectively turn Nigeria into a prefunded market for international institutional investors. However, the SEC subsequently clarified that foreign portfolio investors are not required to prefund their accounts when trading in the Nigerian capital market.
Nigeria was originally upgraded from Unclassified to Frontier Market status during FTSE Russell’s March 2026 interim review, with implementation scheduled for September 2026. The subsequent review delayed the process, but FTSE Russell has now confirmed that the reclassification will proceed from September 21.
CSCS said the market has implemented several operational improvements to support the shortened settlement cycle, including greater automation of trade notifications, enhanced post-trade processes, stronger risk-management arrangements and closer coordination among brokers, custodians and settlement banks.
Commenting on the development, the Managing Director and Chief Executive Officer of CSCS Plc, Shehu Shantali, said the decision affirmed the resilience of Nigeria’s capital market infrastructure and the collective effort that went into delivering the T+1 transition.
He said the significance of the development extends beyond Nigeria’s return to Frontier Market status, noting that the review demonstrated the market’s ability to implement major structural reforms while responding to the needs of international investors and maintaining the integrity of its settlement framework.
Shantali said the transition to T+1 was not simply about settling transactions one day earlier but about building a more efficient, resilient and globally competitive market. He added that the shortened cycle would help reduce settlement exposure and support deeper participation by domestic and international investors.
Nigeria’s capital market community had earlier mounted a strong defence of the country’s T+1 settlement reform after FTSE Russell suspended its planned reclassification.
Market operators argued that the decision placed too much emphasis on a single operational issue while overlooking broader regulatory, technological and structural reforms in Nigeria’s capital market.
The postponement had surprised stakeholders who viewed the migration to T+1 settlement as an important step towards improving market efficiency and aligning Nigeria with global best practices.
Operators also warned that the delay risked overshadowing years of reforms that had positioned Nigeria for its expected return to FTSE Russell’s Frontier Market Index.
FTSE Russell’s decision to proceed with the reclassification now provides a further boost to Nigeria’s efforts to strengthen its capital market infrastructure, attract broader investor participation and align market operations with global standards.
