In November of 2024, the European Securities and Markets Authority (ESMA) recommended that the European Union (EU) adopt a deadline of 11 October 2027 for a change to a T+1 trade settlement lifecycle for securities, the same deadline proposed by the UK Accelerated Settlement Taskforce in its February 2025 report here.
corfinancial® recently sat down with Andrew Douglas, chair of the UK Accelerated Settlement Taskforce Technical Group (AST), charged with overseeing the delivery of a T+1 settlement cycle in the UK. In this interview we discuss the future transition of T+1 in the UK and the practical steps asset management firms can take to smooth the process.
Andrew Douglas: “Winston Churchill famously, if the contents of a report had to be actioned immediately, would add a note to the report that read: ‘Action This Day’. What people may not know is that that today five percent of UK cash equity trades are already settling on T+1. It is clearly possible to operate a T+1 system within a T+2 environment and I encourage all participants to ‘action this day’ and make the change to T+1 sooner rather than later.
Reflecting on what happened in the US, with only three months to go 30% of firms had done little to prepare according to research prepared by the Value Exchange, who undertook periodic readiness or ‘pulse survey’ studies across a wide cross section of participants. We are planning to ask Value Exchange to do the same in the UK, starting in 2025 with a pulse survey every 6 months so we can track our own readiness.
‘Don’t wait until 11 October 2027’ is the key message. I advise firms to stay informed and use information published on our new website, and extract from it what you need to do to be compliant. Create a development plan and use the 2025 budget cycle to secure funding for your preparatory projects in 2026 – carrying out the necessary updates to your own back- and middle- office processing. This will ensure that at the start of 2027, your firm will be ready for testing.”
Read the original article here.
