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 – Expectations for the UK move to T+1 securities settlement
The FCA has published a letter setting out expectations for firms supervised by the FCA in the Asset Management and Alternative Firms portfolio, ahead of the upcoming market transition from a T+2 to a T+1 securities settlement cycle on 11 October 2027.
Read the letter here.
If you have any questions about the work of the Accelerated Settlement Taskforce, or the move to T+1, please contact Kevin Sloane.
UK and EU T+1 Pulse Survey
The move to T+1 settlement is set to transform post-trade operations across the UK and EU.
Understanding how prepared market participants are and where the challenges lie is critical to ensuring a smooth transition.
The Accelerated Settlement Taskforce, in partnership with Euroclear and the Depository Trust & Clearing Corporation (DTCC) is inviting market participants to share their views in a quick survey.
Why take part?
- Receive personalised benchmarks vs your peers.
- Help shape the collective view of what is ready and what is at risk.
- Contribute to insights that will guide industry wide readiness efforts.
It only takes ten minutes and your input will directly inform the industry’s next steps.
Click here to take part.
FCA: The readiness of firms for T+1
The FCA has published information relating to the readiness of firms for T+1. The news item states:
- Automation is important for an efficient settlement process and market participants’ plans support this.
- While the FCA is playing a supportive role to the market, the regulator will act if firms are not prepared for the October 2027 deadline.
- The FCA cannot meet with all relevant authorised firms – their engagement should be seen as part of a broader market initiative to communicate about T+1, including by firms through their client engagement.