The UK plans to implement a T+1 settlement cycle for securities trades by the end of 2027, regardless of whether the European Union adopts the same timeline.
A recent report from the UK Accelerated Settlement Taskforce’s T+1 technical group outlines draft recommendations on how the transition will take place and how firms should prepare. Industry stakeholders have emphasized the need for the UK, EU, and Switzerland to synchronize their trading cycles to avoid costly delays in securities transactions. Notably, the US has already transitioned to T+1 this year.
Andrew Douglas, chair of the taskforce group, expressed to Bloomberg that it would be ideal for the UK, EU, and Switzerland to migrate simultaneously, but “the ball is in their court to work out if it’s feasible.” While the EU has not dismissed a potential move to T+1 by late 2027, it has yet to make any commitments and has suggested dates in 2028. However, the report indicates that “recent developments in the EU suggest there is an emerging appetite for the EU to align a T+1 settlement cycle alongside the UK.”
If the migration schedules do not align, the report suggests that certain instruments, such as ETPs and Eurobonds, may be exempt for the UK until the EU and Switzerland transition.
Additionally, the report recommends implementing necessary operational changes—such as establishing market standards for allocations, confirmations, and electronic processes for exchanging Standard Settlement Instructions (SSIs)—effective from 2025 to aid in the transition.
Douglas urged all market participants to engage in the consultation process to ensure that the final recommendations reflect the comprehensive needs of the industry.