European T+1 Task Force Welcomes UK Report
Posted by Colin Lambert. Last updated: April 11, 2024
The European T+1 Industry Task Force, which was established in 2023 to provide a platform for industry stakeholders to connect with authorities ahead of any transition to T+1 settlement in the region, has issued a statement welcoming the recent publication of a report by the UK Accelerated Settlement Task Force.
In particular the task force highlights the UK’s statement that the “UK and other European jurisdictions should continue to explore opportunities for close collaboration…to see if they can align their moves to T+1.”
In the statement, the members Task Force emphasise the need for a coordinated approach between the EU/EEA, Switzerland and the UK, adding, “Our shared ambition is for a low-cost, efficient, safe, resilient and integrated post-trade environment which supports globally competitive European securities markets, with high levels of automation and standardisation. We anticipate that alignment of dates will reduce the complexity of implementation projects for firms active across multiple jurisdictions, and minimise scoping issues related to instruments listed, traded and settled across geographical Europe.
While a coordinated move by European markets generally is to be welcomed, there is a risk of the UK and Switzerland being held back by the EU. The latter has a much more complex regulatory landscape compared to the single jurisdictions of the UK and Switzerland, something this is likely to delay any transition to T+1 in the region until at least 2028.
The Industry Task Force says it intends to conduct further analysis of how Europe might transition to T+1, including the development of a roadmap for adoption of T+1 in EU securities markets and a potential timeline that would allow enough time for firms to assess the changes they need to undertake, for the industry to conduct comprehensive testing, and for authorities to make the necessary regulatory changes. “This analysis will also incorporate lessons learned from the North American migration to T+1 in May 2024,” the task force states. “We intend that, once completed, this analysis will be shared publicly.
“Given the strong support for coordination across jurisdictions, the European T+1 Task Force, and its technical sub-groups, believe there is significant opportunity to work collaboratively with the proposed UK Technical Group and looks forward to doing so,” it concludes.