The UK will push ahead with the move to a T+1 settlement cycle for securities trades by the end of 2027, regardless of whether the European Union makes the switch at the same time.
A report from the UK Accelerated Settlement Taskforce’s T+1 technical group sets out draft recommendations for how the move will work and how firms should prepare.
Industry players have called for the UK, EU and Switzerland to align to the same cycle to avoid the risk costly lags in securities trades. The US switched to T+1 this year.
Chair of the taskforce group, Andrew Douglas, tells Bloomberg that ideally the UK, EU and Switzerland will all migrate at the same time, but “the ball is in their court to work out if it’s feasible”.
The EU has not ruled out a late 2027 move to T+1 but has not made any commitment and has floated dates in 2028. Nevertheless, the report states: “Recent developments in the EU suggest there is an emerging appetite for the EU to align a T+1 settlement cycle alongside the UK.”
If the migrations are not aligned, the new report says that some instruments, such as ETPs and Eurobonds, would be exempted for the UK pending EU and Switzerland catching up.
Elsewhere, the report recommends that irrespective of the migration date to T+1, appropriate operational changes, such as market standards for allocations and confirmations and electronic processes for exchanging SSIs, should be mandated with effect from a date in 2025 to help prepare.
Says Douglas: “As an independent, inclusive working group, supported by the public authorities, I’m calling on all market participants to engage in this consultation so that together we can ensure the final recommendations for implementation reflect the full spectrum of industry needs.”