To align with other major global markets, the UK is preparing to move to a T+1 securities settlement cycle on 11 October 2027, reducing the current T+2 timeframe. This means that when a security is traded, settlement must occur within one business day rather than the current two-day cycle.
The aim is to enhance market efficiency, reduce operational and counterparty risk and strengthen the UK’s position as a competitive financial centre. The transition is being overseen by the Accelerated Settlement Taskforce (AST), with support from the Financial Conduct Authority (FCA), HM Treasury, and the Bank of England. The AST’s Implementation Plan outlines the operational and technical market-wide changes required.
This change will significantly affect asset managers, alternative investment firms, brokers, custodians, trading venues and third-party service providers. Firms should now be assessing how the move to T+1 affects their operational processes, systems and governance frameworks.
International Context:
The UK’s transition follows similar moves by other jurisdictions:
- May 2024: The US, Canada, Mexico and Argentina migrated to T+1 settlement.
- 11 October 2027: The EU will implement T+1 for most securities (with certain SFT exemptions), following legislative approval in September 2025.
- Switzerland has also confirmed its intention to adopt T+1 in October 2027.
Key Regulatory Expectations:
The FCA has made it clear that firms must begin preparations now. From 11 October 2027, all transferable securities traded on UK trading venues and settled through a UK Central Securities Depository (CSD) (unless exempt) will be required to settle on a T+1 basis.
Key FCA expectations are as follows:
- Establisha T+1 Project Plan by the End of 2025
Firms should:
- Familiarise themselves with the AST Final Report and technical recommendations.
- Identify internal and external changes required across systems and processes.
- Secure the necessary budget and resourcing.
- Begin reviewing operational processes to identify potential bottlenecks.
Under SYSC 4.1.1R of the FCA Handbook, firms are required to have robust governance arrangements, including effective processes and strategies to ensure regulatory compliance. Establishing a clear T+1 transition plan by the end of 2025 will help fulfil this obligation.
- ReviewTrading,Clearing and Settlement Workflows
The FCA expects firms to:
- Identify manual processes that may prevent timely trade allocation and settlement.
- Review inventory management to ensure cash and securities are available earlier.
- Engage settlement agents to understand revised expectations for confirmations, allocations and settlement instruction timelines.
- Ensure securities lending recall processes support accelerated settlement.
This aligns with the requirement under SYSC 6.1.1R, which mandates firms to maintain adequate policies and procedures to manage their business and regulatory risks appropriately.
- Engage with Outsourced Service Providers
Firms remain fully accountable for regulatory compliance even when key trading, settlement or operational functions are outsourced. They must ensure third-party providers are prepared for T+1.
As outlined in SYSC 8, firms must take reasonable steps to ensure that outsourced providers deliver services in compliance with applicable requirements and that oversight remains effective at all times.
- ImplementRequiredChanges by the End of 2026
Several AST recommendations should be implemented by the end of 2026, including:
- Standardisation of Standing Settlement Instructions (SSIs).
- Earlier trade-date allocations.
- Conduct Comprehensive Testing in 2027
Firms must carry out internal and external testing well ahead of the October 2027 deadline to ensure all changes operate effectively under real market conditions.
According to SYSC 13, firms must test key operational systems where failure would pose a material risk. Early testing is critical to ensure continuity and mitigate potential settlement issues.
How Complyport Can Help?
The shift to T+1 represents a significant operational change for many firms. Complyport can support you through each stage of your transition, including:
- Operational Readiness Reviews: Assessment of your existing trading, clearing and settlement workflows to identify gaps and map required changes.
- Regulatory Guidance and Implementation Support: Clear interpretation of FCA expectations and AST recommendations, and practical assistance embedding these requirements into your processes.
- Governance and Documentation: Updating your compliance manuals, operational procedures, outsourcing arrangements and governance frameworks to reflect T+1 obligations.
- Training and Stakeholder Briefings: Tailored training for Compliance, Operations, Front Office and Senior Management on the practical impact of moving to T+1.
Contact Us
To understand how these regulatory developments may impact your business and to discuss your compliance needs, contact Complyport today to book a meeting with one of our Subject Matter Experts.
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