FTSE Russell Delays Nigeria’s Return to Frontier Market Index Over T+1 Settlement Concerns

June 30 () — Global index provider FTSE Russell has placed Nigeria’s planned reclassification to Frontier Market status under further review, citing concerns over the country’s recent transition to a T+1 securities settlement cycle.

The decision, announced on Tuesday, delays Nigeria’s expected return to the Frontier Market index and gives FTSE Russell additional time to assess the impact of the new settlement framework on international institutional investors.

Nigeria had been upgraded from “Unclassified” to “Frontier Market” during FTSE Russell’s March 2026 interim review, with the reclassification initially scheduled to take effect in September 2026.

However, the latest development means the planned upgrade has been put on hold pending further assessment.

In a statement, FTSE Russell explained that Nigeria’s migration from a T+2 to a T+1 settlement cycle, which took effect on June 1, 2026, could effectively make the market a prefunded one for foreign institutional investors.

“From 1 June 2026, the Nigerian equity market transitioned from a T+2 to a T+1 settlement cycle, which could result in Nigeria becoming a de facto prefunded market for international institutional investors,” the index provider said.

It noted that mandatory prefunding is viewed negatively under its “Settlement Cycle (Delivery versus Payment)” criterion, one of the five core quality benchmarks used in determining Frontier Market eligibility.

According to FTSE Russell, the reclassification will remain under review while it evaluates whether the new settlement process could create operational challenges for global investors.

The organisation said it expects to provide a final decision on Nigeria’s Frontier Market status by the end of August 2026.

The outcome will be closely watched by market participants, as inclusion in the Frontier Market index could boost the visibility of Nigerian equities and attract additional portfolio inflows from global funds that track FTSE Russell’s benchmark indices.