SEC proposes committee to restore Nigeria to global indices

SEC proposes committee to restore Nigeria to global indices

The Securities and Exchange Commission has proposed the establishment of an Index Reclassification Steering Committee to guide Nigeria back into global financial indices following positive indicators from major international ratings agencies.

The move comes after S&P Dow Jones Indices placed Nigeria on its 2027 Watchlist for possible reclassification from a Standalone Market back to a Frontier Market status.

In a strategy and position paper titled, Nigeria’s Path to Index Reclassification: A Unified Strategy on Policy Consistency and Operational Resilience, the Director-General of the SEC, Dr Emomotimi Agama, described the reviews as the country’s most significant opportunity in a decade to regain international investor confidence and attract foreign portfolio investment.

According to a statement from the SEC on Thursday, Agama said international index providers were no longer focused on the design of market reforms but were now strictly evaluating whether existing policies were being implemented consistently.

Agama stressed that the focus had shifted from planning to execution, declaring, “The reform programme is complete; the evidence programme now begins.” He added that Nigeria’s ability to demonstrate the resilience of its market infrastructure under varying conditions throughout the remainder of 2026 would be critical to the review’s success.

To ensure Nigeria successfully navigates the observation window leading up to the 2027 decision, the commission has outlined five critical structural areas that require absolute policy stability.

Chief among these is the ‘durability of the foreign exchange regime’, which requires long-term predictability and open access within the currency market to allow seamless international trading. Alongside FX stability, global index providers are demanding ‘uniform regulatory enforcement’, meaning that capital market rules must be applied equally, transparently, and non-discretionarily across all sectors.

Furthermore, the SEC stressed that Nigeria must entirely ensure the ‘avoidance of retroactive policy changes’, as sudden, retroactive directives or policy reversals severely disrupt investor planning and erode market trust. Achieving this stability requires deep ‘coordination among fiscal, monetary,  and  regulatory authorities’ to  prevent  conflicting economic policies.   Finally,  the framework notes that the ‘predictable enforcement of investor rights through the judicial system’ is essential for resolving market disputes and protecting foreign assets.

The parallel review by FTSE Russell was triggered in part by Nigeria’s successful migration to a T+1 settlement cycle in June 2026. This transition shortened the transaction cycle to one day after trading, putting Nigeria ahead of many frontier and several emerging markets in terms of settlement efficiency.

To maintain this momentum, Agama stated that the country must prove its operational resilience through sustained performance under the T+1 regime, efficient foreign exchange repatriation timelines, and deep, liquid FX markets.

The SEC warned that imposing ad hoc foreign exchange restrictions during periods of market volatility or experiencing market infrastructure failures could completely derail Nigeria’s upgrade prospects.

The proposed steering committee will serve as a centralised body to co-ordinate data and policy across Nigeria’s entire financial architecture. The panel will include representatives from the SEC, the Central Bank of Nigeria, the Federal Ministry of Finance, the Federal Inland Revenue Service, the Nigerian Exchange, the Central Securities Clearing System, and the FMDQ.

To back its advocacy with empirical data, the SEC will compile a quarterly Reclassification Evidence Pack. This document will contain certified data on settlement performance, liquidity, and dispute resolution timelines, which will be submitted simultaneously to S&P DJI, FTSE Russell, and MSCI.

The commission intends to inaugurate the steering committee and issue its first evidence report

in the third quarter of 2026, keeping Nigeria on track for continuous technical engagement ahead of the 2027 country classification reviews.

Source: https://punchng.com/sec-proposes-committee-to-restore-nigeria-to-global-indices/