CIS Kicks over FTSE Russell’s Position on T+1 Settlement Cycle

The Chartered Institute of Stockbrokers (CIS) has characterized FTSE Russell's decision to postpone Nigeria's reclassification to Frontier Market status as a temporary review, emphasizing that it does not signify a setback for the country's capital market reforms.

Nigeria achieved a significant milestone on July 1, 2026, by transitioning to a T+1 settlement cycle. This move makes it the first market in Africa to implement a shortened settlement framework, intended to enhance efficiency, mitigate risk, and improve global competitiveness. The CIS stressed that this new T+1 cycle is a landmark achievement that will bolster investor confidence and market efficiency.

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The introduction of T+1 demonstrates Nigeria’s commitment to international best practices and strengthens the country’s competitiveness within the global investment community.

FTSE Russell announced its decision to further assess the practical implications of Nigeria's shift from a T+2 to a T+1 settlement cycle for international institutional investors. The CIS acknowledged this postponement, which occurred on June 30, 2026, but reiterated that Nigeria's transition to T+1 on June 1, 2026, represents one of the most crucial reforms in its capital market history.

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We recognise the operational challenges that may arise from the shortened settlement cycle. Accordingly, sustained engagement and constructive collaboration with all stakeholders will be critical to strengthening the reform, addressing emerging concerns, and ensuring that the Nigerian capital market remains efficient, inclusive, and accessible to all categories of investors.

The institute highlighted that this reform aligns Nigeria with major global markets that have adopted faster settlement systems to improve operational efficiency, reduce settlement risk, and boost liquidity. CIS stated that the introduction of T+1 demonstrates Nigeria's commitment to international best practices and enhances its competitiveness. "We recognise the operational challenges that may arise from the shortened settlement cycle. Accordingly, sustained engagement and constructive collaboration with all stakeholders will be critical to strengthening the reform, addressing emerging concerns, and ensuring that the Nigerian capital market remains efficient, inclusive, and accessible to all categories of investors," the Institute said.

Regarding FTSE Russell's concerns about the shortened settlement period potentially creating a de facto prefunded market for foreign institutional investors operating across multiple jurisdictions, CIS maintained that Nigeria's migration to T+1 has not altered its Delivery versus Payment (DvP) settlement model. Under DvP, securities and cash are exchanged simultaneously. CIS clarified, "The implementation of T+1 does not require foreign portfolio investors to prefund their transactions. The market continues to operate under internationally recognised Delivery versus Payment principles, with the only change being the reduction of the settlement period from two business days to one."

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The implementation of T+1 does not require foreign portfolio investors to prefund their transactions. The market continues to operate under internationally recognised Delivery versus Payment principles, with the only change being the reduction of the settlement period from two business days to one.