Two years to go: Your journey to UK T+1 must start now
The countdown is on to T+1. Here’s everything your firm needs to know to get prepared, writes Andrew Douglas
Saturday marked exactly two years until the UK will join the global T+1 club, shortening its securities settlement cycle from two days (T+2) to one (T+1), on 11 October 2027.
This move requires preparation and collaboration across the investment industry because it affects all market participants. And with the UK, EU and Swiss deadlines for T+1 aligned, the foundations laid now will be critical to delivering a smooth transition across the whole of Europe.
The transition to T+1 is not only a technical, and in some cases behavioural change, but a strategic reform that will play an important role in modernising UK markets in line with the government’s Mansion House agenda, which aims to boost investment, unlock efficiency and strengthen the UK’s competitiveness. It is also a gateway to the broader digitalisation agenda.
Faster settlement will reduce counterparty and liquidity risk, free up capital, and make our markets more efficient and resilient. But these benefits will only accrue if preparation moves from planning to execution in line with the broader market deadline.
What you should be doing now
Following the publication of the T+1 implementation plan by the UK Accelerated Settlement Taskforce (AST) many firms have made a strong start to preparations. Research conducted in the first half of this year indicates that over two-thirds of firms have already started preparations. This high level of industry engagement is encouraging, but there is still a long way to go if all participants are to successfully cross the finish line in October 2027.
Those who have begun their preparations already mustn’t take their foot off the accelerator, and those who haven’t started must act now.
By the end of this year, the Taskforce recommends that all market participants should have:
- Reviewed the UK AST’s Implementation Plan published in February.
- Calculated the impact on their firm, because every firm is at a different point in their technological and operational life cycle and not everyone will require the same level of preparation
- Designed a plan to deliver T+1 capability in 2026, most likely via automation if you follow the AST peer recommendations
- Secured budget to deliver this development plan.
These are the foundational steps to ensure not only a smooth transition, but one that is well thought through, delivered securely and maintains the resilience of the market. It will also prepare you well for what is likely to be an intense agenda of change as we enter the digitalisation era.
Automation is now essential
The North American migration to T+1 in 2024 demonstrated that the benefits of accelerated settlement are real, but there are lessons to be learned from this transition. Most importantly, the importance of automation.
The move to T+1 will remove over 80 per cent of the time firms currently have to correct settlement instruction errors and recall stock on loan where applicable. Manual processes that just about work today won’t survive in a T+1 world. The only route to resilience is automation across the entire post-trade chain.
When supported by good data, automation can help firms to keep overall costs down, so I urge firms to get ahead and invest in it now to prevent complications and rising costs down the line.
What’s more, some firms are starting to recognise the competitive advantage of automation and are choosing to work solely with other automated firms. This will create momentum towards market-wide automation, which will pay off on 11 October 2027.
A smooth transition to T+1
The UK Accelerated Settlement Taskforce continues to work closely with the European Industry Committee led by my good friend Giovanni Sabatini in order to ensure a straightforward and seamless transition.
As well as sharing progress and developing joint migration plans, I am especially pleased that the UK, EU and Switzerland will all transition jointly to T+1 on the same day.
By aligning timelines, standards, and recommendations across Europe, the UK can deliver a coordinated transition that avoids fragmentation for firms operating across borders.
T+1 is not a compliance exercise – it’s an opportunity to renew the UK’s market infrastructure for the next generation.
Whilst there’s a lot of work to do, we know that the rewards will be meaningful. Putting the work in now will lay the foundation for a smooth, market-wide transition so that in exactly two years’ time, the first day of mandated T+1 trading is largely uneventful. That’s the aim.
So please visit our website and get your plans for 2027 in order now, it’s not too late, but it may soon be so.
Andrew Douglas is chair of the UK Accelerated Settlement Taskforce