Home Research Share The Path to T+1 in Europe In Q1 2025, DTCC partnered with two independent research consultancies to assess how ready the global finance community is for Europe’s move to T+1 settlement in October 2027. In their research studies, The ValueExchange and Firebrand Research each looked at T+1 in Europe through a different lens. The ValueExchange’s T+1 Pulse Surveys focus on the UK’s journey to T+1, providing quarterly insights from over 550 financial services professionals globally. The Firebrand Research whitepaper “Tackling Post-Trade Friction” features the findings of in-depth interviews with market participants across Europe. We are delighted to share some key findings from these research studies, both of which highlight the need for firms to start planning in 2025, and for investment in automation across allocation, confirmation and SSIs. T+1 presents market participants with an opportunity to ensure their post-trade operations are secure, reliable, efficient, resilient and future-proof. Our market-leading post-trade solutions can help you achieve seamless straight-through-processing and team of expert consultants can guide you through the journey to T+1 in Europe. DTCC has over two decades of experience operating in Europe and has clients across 30+ European markets. The countdown to T+1 has started. From assessment and planning, to implementation, testing and transition, we’re here to ensure you are T+1 ready. Val Wotton Managing Director andGlobal Head of Equities Solutions Home Accelerated Settlement Reserach Share Research KEY RISKS & CONCERNS THE IMPORTANCE OF AUTOMATION ARE YOU T+1 READY? THE RESEARCH IN FULL Moves to T+1 & Beyond Following the successful implementation of T+1 settlement in the US in May 2024, European markets have begun planning their moves to T+1. In the UK, the UK Accelerated Settlement Taskforce published a report in early 2025 detailing the steps that must be taken by the industry and regulators to move to T+1 in the UK by 11 October 2027 In the European Union, the European Securities and Markets Authority (ESMA), the European Central Bank (ECB) and the European Commission endorsed a coordinated move for the region to T+1 on the 11 October 2027 In Switzerland and Liechtenstein, the Swiss Securities Post-trade Council announced that the market would shorten its settlement cycle on the same date as the EU and the UK In APAC markets, there has been discussion about a coordinated move of Australia and New Zealand in 2030, with other Asian markets, such as Singapore and Japan, potentially choosing to move earlier. SOURCE: FIREBRAND POST-TRADE FRICTION WHITEPAPER, 2025 CLICK HERE FOR FAQs ABOUT EUROPE’S MOVE TO T+1 Key Risks & Concerns for T+1 While the US’s successful transition to T+1 provides valuable experience and best practices to market participants, such as the importance of industry collaboration, regulatory mandate and global co- ordination, Europe’s post-trade landscape brings unique challenges. The number of CSDs and clearing houses operating on different processing schedules and operational frameworks, different currencies, and tax and legal systems bring additional complexity. When Firebrand Research spoke to firms about their greatest concerns for European T+1, the five most frequently mentioned were: European misalignment and delays; PSET matching; FX on T+2; incorrect SSIs; and lack of automated confirmation matching. SOURCE: FIREBRAND POST-TRADE FRICTION WHITEPAPER, 2025 The ValueExchange also asked its survey respondents for their views on key enablers to a smooth transition to T+1 in Europe. The importance of collaboration, alignment between the UK and EU, and investment in process transformation and automation were all highlighted. The Firebrand Research whitepaper noted that the scale of the challenge for firms varies dependent on their size, type and focus, and whether they provide cross-border services. Over the past decade, Europe has seen a steady increase in cross-border fund flows, predominantly institutional, as illustrated by statistics from the European Fund and Asset Management Association (‘Our industry in numbers’, Q2 2024) with almost 50% of investment flows in the EU being cross-border in 2023. SOURCE: FIREBRAND POST-TRADE FRICTION WHITEPAPER, 2025 SOURCE: THE VALUEEXCHANGE, Q1 2025 PULSE SURVEY The UK Accelerated Settlement Taskforce implementation plan outlined that to meet UK T+1 market practice guidelines: allocation and confirmation processing will need to be completed no later than 23:59 UK time on T+0 settlement instructions will need to be sent no later than 05:59 UK time on T+1 However, The ValueExchange survey showed that a significant proportion of allocation, confirmation and settlement instructions – 29%, 29% and 20% respectively – miss these market practice guidelines. The UK Accelerated Settlement Taskforce has set a target date of 31st December 2026 for all allocation and confirmation to be completed on T+0. With 76% of respondents viewing trade date processing as the most important enabler to the long-term success of the UK’s transition to T+1, it is crucial that firms start to prepare for the 2026 deadline now. In April 2025, DTCC hosted a virtual event to discuss the findings of The ValueExchange survey and what firms need to do to navigate the transition to T+1. Barnaby Nelson, CEO of The ValueExchange, was joined by Andrew Douglas, Co-chair of the UK Accelerated Settlement Taskforce, Charlie Pugh, UK Product Management at Euroclear and Matt Johnson, ITP Industry Relations at DTCC, to discuss the challenges facing firms that are not meeting T+1 timescales, and why complacency by market participants is a cause for concern. WATCH THE FULL EVENT REPLAY HERE Settlements Failures & Their Causes European markets have a different model to the US for the agreement of settlement details, but early confirmation and allocation remains an essential component to achieving accelerated settlement timelines. Settlement failures are a key barrier to the successful implementation of T+1 with increased time pressure to resolve failed settlements in a T+1 environment. Many firms that Firebrand Research interviewed engaged in a root cause analysis as part of their CSDR implementation projects and were able to provide detailed statistics on the underlying causes of failed settlements in 2024. SOURCE: FIREBRAND POST-TRADE FRICTION WHITEPAPER, 2025 DTCC’s Val Wotton spoke to Virginie O’Shea from Firebrand Research about the cause of settlement failures. Hear how a reliance on manual processes during trade matching, confirmation and allocation increases the risk of settlement failures. (2 mins) VIEW THE FULL INTERVIEW(17 mins) In addition to financial losses and penalties, Firebrand Research identified a number of indirect costs that should be considered when calculating the cost of a settlement failure, including staff costs, liquidity costs due to the tie-up of cash or securities and the opportunity costs of inefficiency. The Cost of a Failed Settlement FINANCIALLOSSES FINANCIALPENALTIES STAFF COST TORESOLVE FAILS INTERESTCHARGES LIQUIDITYCOSTS OPPORTUNITYCOSTS SOURCE: FIREBRAND POST-TRADE FRICTION WHITEPAPER, 2025 When it comes to T+1, the cost of doing nothing—or doing it poorly—can far outweigh the investment in getting it right. Preparing early and thoroughly isn’t just best practice, it’s essential. At DTCC Consulting Services, we help firms navigate the complexity with confidence, from understanding counterparty performance to identifying operational gaps. The firms that act now, with the right support, will be the ones best positioned to mitigate risk and avoid costly missteps. Rebecca Ashton, DTCC Consulting Services The Importance of Automation Europe’s transition will not only be more complex than the US move to T+1, but also more costly. Firebrand Research estimates the total cost of EU T+1 projects at a global custodian with a large client base and multiple post-trade systems could reach $36m. In its Q1 2025 Pulse Survey, The ValueExchange asked firms where they are planning to focus their investment for T+1 in the UK. Three of the top four areas identified were middle office automation, with allocation and confirmation and SSI automation being in first and second place respectively. SOURCE: THE VALUEEXCHANGE, Q1 2025 PULSE SURVEY Allocation & Confirmation Comparing The ValueExchange and DTCC data, the case for automation is clear. DTCC’s internal analysis of European transactions matched on DTCC’s central trade matching platform, CTM®, shows that market participants automating allocation and confirmation in the top 15 European markets achieved an average of 95.5% same day matching in Q4 2024. You can see a breakdown of DTCC’s same day match agreed rates by region here. By completing trade matching activities on trade date, matched and agreed transactions can seamlessly and efficiently enter the settlement process. For markets with higher volumes of securities transactions like the UK, Germany or France, same day match agreed rates are around 95% which suggests a high rate of post-trade automation. However, some European markets with smaller trade volumes and smaller firms still rely on manual post-trade processes, making it much more difficult to achieve T+1 timelines. Sean McEntee, DTCC STANDARD SETTLEMENT INSTRUCTIONS (SSIs) As noted in the Firebrand Research whitepaper, the Bank of England has directly endorsed the adoption of the Financial Markets Standards Board’s (FMSB) Standards for Standard Settlement Instructions (SSIs). The FMSB Standards establish definitive market practices for the sharing of SSI data, promoting a standardized format and usage of electronic solutions to enhance transparency, improve accuracy and reduce trade failures. A significant number of trade failures are a direct result of inaccurate or missing settlement instructions. With shorter settlement cycles, it’s vital that market participants move away from the manual exchange of SSIs. ALERT® enables a community of investment managers, brokers and custodians to securely manage and automatically share accurate SSI data globally. ALERT has over 16m SSIs, with 75% being non-US. Jan Coughlan, DTCC PSET PSET (Place of Settlement) matching is a focus for market participants because of the number of data points, and the potential for discrepancies in settlement locations which must be resolved by brokers and custodians. The PSET field isn’t used in matching unless the client opts in, but ESMA’s RTS proposals recommended that PSET and place of safekeeping (PSAF) should become industry best practice to reduce the number of settlement fails. It’s surprising that PSET matching is noted as such a concern for market participants but it’s good to see that it’s also an area where firms are looking to invest. Clients using ALERT are able to agree on PSET, and 97% of our sell-side clients and 91% of buy-side clients* are already adding PSET and enriching their CTM trades with SSIs. PSET will become a mandatory field in DTCC’s central trade matching platform, CTM, by the end of 2025. Matt Johnson, DTCC* Source: DTCC, 1 Jan – 31 Dec 2024 Hear DTCC’s Val Wotton and Virginie O’Shea from Firebrand Research discuss why it is so important to mitigate the risk of settlement failure and for market participants to invest in automation. (2 mins) VIEW THE FULL INTERVIEW(17 mins) Are You T+1 Ready? The ValueExchange asked survey respondents about expected compliance with UK market messaging guidelines, with the UK targeting 31st December 2026 for when all trade allocations and confirmations will need to be completed on trade date. More than one quarter of firms said they were likely to miss the market deadline for allocations on T+0 and just under one quarter of firms are likely to miss the market deadline for confirmations on T+0. SOURCE: THE VALUEEXCHANGE, Q1 2025 PULSE SURVEY Watch this short clip from an episode of the DTCC Insights Podcast Series, in which The ValueExchange CEO Barnaby Nelson discusses the timeline to a successful transition with DTCC Consulting Services’ Dave Kirby. (1 min) WATCH THE FULL DTCC INSIGHTS EPISODE(20 mins) The Research in Full The ValueExchange is a research, benchmarking and sales enablement company. In February 2025, The ValueExchange administered the first in their T+1 Pulse Surveys focused on the UK’s journey to T+1. Led by the UK Accelerated Settlement Taskforce, with the support of Euroclear, DTCC and industry associations, the key findings draw on insights from over 550 financial services professionals globally. DOWNLOAD FULL REPORT Firebrand Research is a research and advisory services company, working across the capital markets spectrum. In June 2025, Firebrand Research published its latest whitepaper “Tackling Post-Trade Friction: Supporting a Global Shortened Settlement Cycle” which was produced in collaboration with Clearstream, DTCC and Euroclear and featured the findings of in-depth interviews with market participants in Europe. DOWNLOAD FULL REPORT Whatever stage you’re at in your preparations for T+1, we can help. Visit our T+1 webpage for news, insights and to join T+1 events VISIT T+1 WEBPAGE Get in touch to learn more about our post-trade solutions CONTACT US Receive T+1 news andupdates from DTCC SUBSCRIBE NOW back to top dtccdotcom
KEY RISKS & CONCERNS THE IMPORTANCE OF AUTOMATION ARE YOU T+1 READY? THE RESEARCH IN FULL Moves to T+1 & Beyond Following the successful implementation of T+1 settlement in the US in May 2024, European markets have begun planning their moves to T+1. In the UK, the UK Accelerated Settlement Taskforce published a report in early 2025 detailing the steps that must be taken by the industry and regulators to move to T+1 in the UK by 11 October 2027 In the European Union, the European Securities and Markets Authority (ESMA), the European Central Bank (ECB) and the European Commission endorsed a coordinated move for the region to T+1 on the 11 October 2027 In Switzerland and Liechtenstein, the Swiss Securities Post-trade Council announced that the market would shorten its settlement cycle on the same date as the EU and the UK In APAC markets, there has been discussion about a coordinated move of Australia and New Zealand in 2030, with other Asian markets, such as Singapore and Japan, potentially choosing to move earlier.