UK Settlement Task Force Sets Timetable for T+1 Transition
Posted by Colin Lambert. Last updated: February 6, 2025
The UK’s Accelerated Settlement Task Force (AST) has published a third and final update ahead of the establishment of a timeline for the UK’s securities markets to follow North America and transition to T+1 settlement.
The plan includes a Code of Conduct for market participants, which confirms 11 October 2027 as the first trading date in UK cash equities for settlement on a T+1 cycle; a clearly defined scope of behaviours and processes; 12 critical operational actions and 26 highly recommended actions: and five behavioural commitments. The latter includes a push for automation in SSIs, corporate actions, and stock lending recalls and a focus on ‘action this day’, urging firms to begin planning and where practicable, immediate implementation.
The implementation plan has the support of the public authorities including UK government, the Financial Conduct Authority (FCA), and the Bank of England. Primary regulation, UK CSDR, will be amended to reflect that T+1 will be mandatory from 11 October 2027.
AST says an online and in-person event for market participants will be held on 20 February, to provide an opportunity for market participants to hear speakers from the AST detail the critical recommendations made in the Implementation Plan, HM Treasury, the Bank of England and the FCA offer their thoughts on the plan, and to hear a live discussion amongst firms who have already begun to plan their own journey to T+1. Market participants can register here.
“This is a milestone in the UK’s journey to T+1 settlement and reflects a substantial amount of work and co-operation across the industry,” says Andrew Douglas, chair of the UK T+1 AST. “We have a date and a detailed plan for the way ahead. Market participants should start planning now ahead of the 2025 budget process for project funding in 2026. Automation will be a key component of a successful implementation.”
Euroclear is supporting the UK T+1 Accelerated Settlement work with programme management and industry engagement support, and the AST has launched a dedicated website to serve as a resource for industry professionals, policymakers, and stakeholders to stay informed and engaged with the UK’s shift to T+1.
The taskforce is inviting all industry participants to complete a survey to help identify the UK market baseline for readiness. The intent is to repeat these throughout the implementation to monitor collective progress towards the successful implementation of T+1.
On FX, the AST says it has identified two specific conditions which present additional issues for market participants located outside of the UK time zone. These are the timeliness of instruction to support UK transactions. “We believe [the provisions] offer sufficient flexibility to accommodate non-UK time zone Market Participants and note that the provision of timely and economic FX support remains work in progress at the level of all global markets,” it states.
The report has been welcomed by infrastructure provider DTCC. “DTCC supports the recommendations set forth in the UK AST T+1 Code of Conduct, and the recently issued Financial Markets Standards Board (FMSB) Standard for Sharing of Standard Settlement Instructions (SSI). We believe these initiatives are key to driving efficiency, reducing risk, and enhancing transparency in post-trade processes across jurisdictions,” says Val Wotton, general manager, NSCC, DTC & DTCC institutional processing, DTCC. “In particular, we commend the UK AST’s call for the completion of allocation and confirmation processes no later than 23:59 UK time on trade date (T+0), which is a key enabler for T+1 settlement on all trades. The UK AST also recommends that market participants begin preparing for an accelerated settlement cycle by implementing automated trade solutions to achieve T+1 settlement as soon as possible.
“As observed in the US’ move to T+1 settlement, the automation of post-trade processes, including ensuring the accuracy and immediate availability of SSIs, is critical to achieving T+1 settlement,” Wooton continues. “By aligning with these key recommendations, market participants can better navigate the complexities of accelerated timelines and a rapidly evolving financial market ecosystem, driving greater efficiency and ensuring the continued integrity of financial markets.”
The full report can be accessed here
