FTSE Russell Drops T+1 Concerns, Clears Nigeria’s Frontier Market Return

Global index provider FTSE Russell is set to proceed with Nigeria’s reclassification from “Unclassified” to “Frontier Market” status, potentially ending months of uncertainty over the country’s return to the index category.

The reclassification, initially scheduled to take effect in September 2026, is expected to proceed despite concerns surrounding Nigeria’s transition from a T+2 to a T+1 settlement cycle.

Nigeria’s capital market adopted the shorter settlement cycle on June 1, 2026, prompting FTSE Russell to place the country’s reclassification under “further review” in June.

FTSE Russell had raised concerns that the T+1 settlement system could effectively require international institutional investors to prefund equity transactions in Nigeria.

The index provider considers mandatory prefunding a negative factor under its “Settlement Cycle (DvP)” criterion, one of five core Quality of Markets criteria used in determining Frontier Market status.

However, the Securities and Exchange Commission (SEC) subsequently clarified that foreign portfolio investors are not required to prefund their accounts when trading in Nigeria.

The SEC said transactions settled through the Central Securities Clearing System are completed at 5:00 p.m. on T+1 while continuing to operate under the standard Delivery versus Payment framework.

This clarification addressed a key concern surrounding Nigeria’s transition to the shorter settlement cycle.

FTSE Russell initially reclassified Nigeria from “Unclassified” to “Frontier Market” status following its March 2026 interim review.

The implementation is scheduled to begin at the opening of trading on September 21, 2026.

Nigeria had been removed from FTSE Russell’s Frontier Market indices in September 2023 after persistent challenges faced by international investors in repatriating capital and accessing foreign exchange.

The country’s return followed improvements in its foreign exchange market, including the clearance of outstanding FX transaction queues.

FTSE Russell subsequently acknowledged the progress in Nigeria’s FX market before approving the country’s return to Frontier Market status earlier this year.

If implemented as scheduled, the reclassification will restore Nigeria’s position in FTSE Russell’s Frontier Market universe and could improve the country’s visibility among global institutional investors.

FTSE Russell is expected to release further details on its decision by the end of August 2026.