PIMFA
T+1 ACCELERATED SETTLEMENT
In December 2022, the UK Government launched an Accelerated Settlement Taskforce (T+1) to explore the potential for faster settlement of financial trades in the UK.
Transaction date + 1 means the settlement date of a trade is one business day after the trade execution date. For example, if a trade is executed on a Tuesday, settlement, when the buyer receives the securities, and the seller receives the proceeds, should occur on Wednesday.
The US Securities and Exchange Commission has adopted the rule to shorten their settlement cycle for all US securities transactions selling through the Depository Trust & Clearing Corporation (DTCC) to T+1, with effect from 28th May 2024. Trades in the UK and EU are currently settled on a T+2 basis.
No timetable has yet been set for the UK to move towards a T+1 settlement cycle. However, it is expected that the UK Accelerated Settlement Taskforce will make recommendations to the government by the end of 2024. Consideration must also be given to European markets and EU plans for T+1, which have also not yet been confirmed.
In the meantime, further information of the content and material produced by the UK Accelerated Settlement Taskforce Technical Group can be found on the PIMFA T+1 resource page.
- PIMFA FOCUS FOR MEMBERS
The PIMFA T+1 Working Group is raising awareness amongst members and the sector of this future change to trading and settlement processing and identifying what firms will need to consider across their businesses, operations and client-serving.
PIMFA is collaborating with the International Securities Association for Institutional Trade Communication (ISITC) and the Chartered Institute for Securities & Investment (CISI) to investigate the impacts of T+1 and is a member of the Accelerated Settlement Taskforce Technical Working Group.
latest news
FCA T+1 Settlement: time is ticking – why firms should act now
The FCA has published a blog on their findings from their engagement with a range of market participants to understand how preparations are progressing and where challenges remain.
Read the blog here.
The FCA has published a blog on their findings from their engagement with a range of market participants to understand how preparations are progressing and where challenges remain.
Read the blog here.
Accelerated Settlement Taskforce: T+1 preparation survey findings
The Accelerated Settlement Taskforce (AST) has published the key findings from a new UK T+1 pulse survey on firms’ readiness for the UK’s move to T+1 settlement.
With key transition milestones set by the AST, including mandatory T+0 allocations and confirmations by December 2026 and full compliance with T+1 settlement by 11 October 2027, the survey findings show that:
- 95% of surveyed firms are now preparing for the transition
- 60% expect to hit key T+0 confirmation deadlines in 2026
The publication also emphasises a number of practical considerations for firms seeking to stay on track for the 2027 implementation.
FCA – T+1 settlement: Updated letter to Chief Compliance Officers
The FCA has published an update to the letter issued last month to Chief Compliance Officers regarding the transition to T+1. The regulator states the template letter has been updated to better reflect its expectations of Chief Compliance Officers.
Read the updated letter here.