_Market bodies say reforms are paying off as index provider eyes 2027 reclassification_
The Chartered Institute of Stockbrokers and the Association of Securities Dealing Houses of Nigeria have welcomed S&P Dow Jones Indices’ decision to place Nigeria on its 2027 Watchlist for potential reclassification from a Standalone Market to a Frontier Market. The announcement was described as a major boost for investor confidence in the country’s capital market.
In a joint position paper released on Tuesday and signed by CIS President, Fiona Ahimie, and ASHON Chairman, Sehinde Adenagbe, the two bodies called the move a “significant endorsement of the far-reaching reforms undertaken within the Nigerian capital market.” They said it “underscores the growing confidence of the international investment community in the country’s evolving market architecture.”
According to the market operators, S&P DJI’s decision reflects “increasing recognition of the sustained efforts of market regulators, infrastructure providers, dealing members, and other key stakeholders to strengthen market integrity, enhance operational efficiency, deepen liquidity, and align Nigeria’s capital market with internationally accepted standards.” In its Country Classification Review, S&P noted that the “Nigerian regulatory environment has modernised to improve transparency, enforcement, and market integrity.”
However, S&P DJI cautioned that “consistency in policy application and operational resilience are required for reclassification,” which is why Nigeria will be closely monitored through 2026. CIS and ASHON acknowledged the assessment, noting it “demonstrates that Nigeria’s reforms are being positively acknowledged while also identifying areas requiring sustained implementation before a final reclassification decision is made.”
The bodies also responded to FTSE Russell’s recent deferral of Nigeria’s reclassification over prefunding concerns. They clarified that the successful implementation of the T+1 Settlement Cycle has not altered the market’s Delivery versus Payment framework. “Under the DvP principle, the transfer of securities and the corresponding payment occur simultaneously at settlement,” they explained, adding that foreign portfolio investors are not required to prefund transactions. The settlement cut-off time has also been revised from 8:00am to 5:00pm to better accommodate cross-border investors.
While celebrating the milestone, Ahimie and Adenagbe urged stakeholders not to relent. “The placement of Nigeria on the Watchlist should not be viewed as the destination but as an important milestone on the journey towards securing full Frontier Market status,” they said. They stressed that the development “affirms the effectiveness of ongoing initiatives aimed at improving market accessibility, transparency, investor protection, and overall competitiveness.”
The associations concluded that with “sustained reforms, policy consistency, operational excellence, and continued collaboration among all stakeholders, Nigeria will successfully attain Frontier Market classification in due course.” If achieved in 2027, the upgrade is expected to attract more domestic and foreign portfolio investment and position Nigeria as a more competitive destination in the global investment landscape.
