A group representing buy and sell-side firms and market infrastructure providers across Europe has urged the UK, Switzerland, and the EU to coordinate efforts to shorten the settlement cycle for securities trades.
This appeal follows the UK’s recent announcement of its plan to transition to next-day settlement (T+1) by 2027. The taskforce expressed support for the UK’s initiative, noting that if the EU aligns its timeline with this plan, simultaneous adoption could be achievable.
The shift to T+1 is largely influenced by the United States, which is set to implement T+1 settlement in May 2024. Consequently, there is pressure on the EU, UK, and Switzerland to synchronize their settlement cycles to prevent costly delays in securities transactions.
The taskforce emphasizes the need for collaboration among regulators to mitigate potential disruptions. They stated, “We anticipate that alignment of dates will reduce the complexity of implementation projects for firms active across multiple jurisdictions and minimize scoping issues related to instruments listed, traded, and settled across geographical Europe.”
Their shared goal is to create a low-cost, efficient, safe, resilient, and integrated post-trade environment that supports competitive European securities markets, characterized by high levels of automation and standardization.