With complex, interconnected markets, the UK, Switzerland, Liechtenstein and the EU face challenges in moving to T+1 settlement. Not only are there multiple geographies, but also different processing schedules, tax systems, business models and legal frameworks to navigate, as well as 27 EU jurisdictions and over 30 central securities depositories (CSDs). However, guided by the recommendations of their respective taskforces and working groups, they have a common goal: to achieve T+1 settlement on 11 October 2027.
The UK Accelerated Settlement Taskforce published its implementation plan to transition to T+1 in February this year – the culmination of two years of detailed analysis and debate - designed by experts across the industry. Key to the UK report is an emphasis on the importance of automation in achieving timely settlement.
In June, EU lawmakers agreed on the final critical legislative changes to the Central Securities Depositories Regulation (CSDR), paving the way for the EU T+1 Industry Committee to release their T+1 recommendations on 30 June 2025. The EU roadmap addresses the most critical operational considerations, identifying focus areas including standardisation of processes, the enhancement of technology and infrastructure, and the need for regulatory support. The EU T+1 roadmap is open for consultation until end August.
Are you T+1 ready? Learn more about global accelerated settlement efforts.
Notable Similarities
The EU T+1 Industry Committee Chair, Giovanni Sabatini, has acknowledged that the EU T+1 shift will be more complicated than the 28 May 2024 U.S. move to T+1, emphasizing that strong leadership and dialogue will be key to success. That said, the similar recommendations in the EU and UK reports are encouraging – and are clearly the result of significant coordination between authorities, the respective taskforce chairs, and the industry. Overall, the UK and EU reports are complementary, with notable similarities, including:
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Both reports focus on automation, with alignment on same-day allocation/confirmation. Both stress the requirement to eliminate manual interventions across all stages of the post-trade lifecycle, investing in straight-through processing to reduce fragmentation and fostering a more unified post-trade environment.
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Broad alignment on what is in scope for T+1 – including transferable securities traded on respective trading venues and those settled in registered CSDs. There is also alignment about what transactions will be exempted (privately negotiated transactions executed on trading venues, bilaterally executed transactions reported to trading venues, initial security recordings, and SFTs).
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Agreement on the importance of testing, with a commitment to readiness testing in January 2027. While a key question remains open around the possibility of industry-wide external testing, there is certainly an appetite for joint and coordinated testing between jurisdictions.
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Both reports emphasize early communication of Place of Settlement (PSET) data between brokerage, custodian and buy-side communities. The EU report specifically emphasizes that delivery of PSET data at the point of allocation ensures the early identification of discrepancies and necessary realignments.
Important Distinctions
However, there are also several important differences in the approach, the level of detail and some focus areas in each report. Key among these:
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To address operational complexity and the fragmented infrastructure ecosystem, the EU T+1 Industry Committee recommends very specific timings for various “gating events” – activities and processes that occur after trades are executed – and other settlement-related processes. By contrast, the UK report highlights just two major time-specific events: the time for completion of all allocation and confirmation processing for a given trading day, and the time at which Trade Date is be deemed to end.
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With shorter settlement cycles, it is vital that market participants move away from manual Standard Settlement Instructions (SSIs) processes. While both reports aim for a similar outcome to improve the efficiency of SSIs, the EU T+1 Industry Committee did not specifically recommend adopting the UK’s Financial Markets Standards Board (FMSB) standard and instead, will be establishing its own, new industry taskforce to devise EU market standards for SSI management and exchange.
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The EU report notes that their committee has considered the need to create a regulatory mechanism to allow for “a temporary disapplication of the CSDR cash penalties.” This means the European Commission can take measures during the T+1 migration period to temporarily suspend cash penalties where a material risk in settlement fails is identified; by contrast, no such regulatory penalty exists in the UK.
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In the EU report, there is specific mention of the need for automation of Corporate Actions buyer protection processing. In a T+1 environment, automated buyer protection functionality would ensure timely and efficient processing of buyer protection instructions, which reduces risk to the buyer and ensures investors are protected. While this is mostly manual in the EU right now, in the UK, this is already offered through Certificateless Registry for Electronic Share Transfer (CREST).
While faster settlement promises greater efficiency, it is clear the industry’s ability to implement automation and optimise post-trade processes will be critical to achieving a smooth, seamless and successful transition.
DTCC is actively supporting the transition to T+1 settlement in Europe through its post-trade solutions, CTM® and ALERT®, and consulting services, helping firms automate, standardise and optimise their post-trade processes.