This article was originally published in Global Custodian on June 16, 2025.
With the UK, EU, Switzerland and Liechtenstein having aligned on a T+1 implementation date of 11 October 2027, market participants must begin working on their readiness roadmaps and path to implementation. While faster settlement promises greater efficiency, the industry’s ability to optimise post-trade processes and implement automation will be the deciding factors in a seamless transition.
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A crucial indicator of post trade efficiency that market participants should aim for is to agree, or ‘match’, the details of their transactions on the day of trade execution. By completing trade matching activities on trade date, matched and agreed transactions can seamlessly and efficiently enter the settlement process, helping to meet T+1 timeframes.
Same-day match agreed rates in the EU and UK are reasonably high. Our internal analysis of European transactions matched on our central matching platform, CTM, indicates that market participants using automated trade matching solutions achieve an average of 92.4% same-day matching, with some markets reaching an average of 95% or more. These statistics reinforce that same-day matching is already occurring at a high rate by those leveraging existing automated solutions.
In Q1 2025, the average same-day match rate across EU markets was 93.4%. In Germany, Spain and Italy, same-day match agreed rates are at 95 to 96%, which suggests a high rate of post-trade automation. This is a stark contrast to other EU jurisdictions with lower trade volumes, where same-day match agreed rates can be as low as 78.5% — suggesting a higher rate of manual processing.
The automation divergence is even more evident between asset classes. The average same-day match agreed rate in the equities markets is as high as 94.83%, while fixed income achieves 89.9%. While considering post-trade improvements in support of T+1, firms should also consider their fixed income levels of automation.
We have also seen automation divergence between firms, with smaller buy-side and sell-side firms tending to rely more on manual processes, including sending trade allocation information via fax, email, or Excel spreadsheets. This manual approach creates a higher rate of errors and can cause trade failures, ultimately leading to delayed settlement and making the achievement of T+1 much more difficult.
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Post-trade automation eliminates manual processing bottlenecks, increasing operational efficiency and enabling timely settlement. With the accelerated settlement spotlight shining on Europe, the question that market participants face is around where post-trade automation should be priortised.
The UK Accelerated Settlement Taskforce (UK AST) published its final report earlier this year outlining the recommended implementation plan for the UK’s transition to T+1 and emphasised the importance of automation in achieving timely settlement. One of the most significant recommendations from the UK AST’s implementation plan is the need to complete allocation and confirmation processes electronically on trade date. By completing these processes on trade date, firms have more time available to address potential errors, reducing the risk of failed or delayed trades. Ultimately, the plan reinforced that post-trade automation is not just a recommendation, but a necessity.
The European Securities and Markets Authority’s (ESMA) recommendations align with these objectives, focusing on harmonization, standardization and modernization across the EU. There is more complexity in the EU region due to differing tax and legal implications and securities systems across 27 countries with many stakeholders, including over 30 CSDs. Like the UK report, ESMA’s recommendations highlight that investing in straight-through processing is crucial due to numerous intermediaries and messages in settlement process. They recommended a coordinated approach to ensure that all participants follow similar operational standards, thereby reducing fragmentation and fostering a more unified post-trade environment.
One of the critical areas of post-trade automation highlighted by the UK AST is automated standard settlement instruction (SSI) sharing. With shorter settlement cycles, it’s vital that market participants move away from manual SSI processes. The Financial Markets Standards Board’s (FMSB) published “Standard for Sharing of SSIs” promoting a standardized format and usage of electronic solutions to enhance transparency, improve accuracy and reduce trade failures. The UK AST and Bank of England have called on market participants to adopt this FMSB Standard, as leveraging a matching platform in conjunction with a golden source SSI repository enables counterparties to agree the economics of a transaction as well as enrich the relevant SSI data into the transaction message accurately and efficiently. This process ensures that counterparties can agree the place of settlement (PSET) as part of the matching process.
The Swiss Securities Processing and Trade Clearing (SwissSPTC) echoed the sentiments, highlighting the importance of collaboration among market participants to standardize and automate industry processes. Their focus on best practices aligns with the UK AST, ESMA and FMSB recommendations, paving the way for increased cross-border trade settlement efficiency.
Beyond the efficiency benefits post-trade automation brings, the T+1 transition is an opportunity for firms to reimagine workflows and consider wider workflow automation, which can deliver even greater benefits. Tri-party matching is one such example, and could become a transformative approach, equipping prime brokers with a golden copy of transaction details relating to a trade match between a hedge fund and an executing broker, bringing real-time standardization and automation to the trade allocation process. The tri-party matching workflow is foundational to unlocking additional clearing opportunities in securities markets for institutional trade flows.
Related: The Journey to T+1 Across Europe
With a specific implementation date in place for the UK, EU, Switzerland and Liechtenstein, market participants transacting in securities that settle at financial market infrastructures in these jurisdictions must consider to the impact of a T+1 implementation. As we move nearer to the T+1 implementation date, to ensure timely settlement, market participants across EU jurisdictions should aim for same day match rates of 95 to 96% which can be best achieved through post-trade automation. At the same time, market participants should use the current focus on post-trade automation to make more wholesale improvements to their middle office processes to position them for even greater benefits. Now is the time to consider implementing central matching and tri-party matching workflows, which, when used in conjunction with golden source SSI databases, can unlock a host of benefits, including enhanced operational efficiency, reduced risk and accelerated settlement, creating a more efficient and safer marketplace.
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