The U.K.’s T+1 Technical Group has published a report outlining proposed recommendations for accelerated securities settlement in the U.K., while calling for feedback from market participants.
The move would shorten the securities settlement cycle to T+1 — settling a trade one business day after it is executed — from T+2, or two business days, a change that was implemented in the U.S. on May 28.
The U.K. government has committed to making the transition by the end of 2027, which is intended to ensure greater operational efficiencies and reduced settlement risk within the country’s financial markets.
The latest report highlighted the importance of automation, adhering to market practices and the potential impact on trading patterns.
The draft recommendations will be open for consultation with all participants in the U.K. equity market until Oct.31. According to the report, the T+1 model will be the global industry standard within the next five years.
Andrew Douglas, chair of the T+1 Technical Group, said in a news release: “This interim report is a key milestone in the U.K.’s journey to T+1 settlement.
“As an independent, inclusive working group, supported by the public authorities, I’m calling on all market participants to engage in this consultation so that together we can ensure the final recommendations for implementation reflect the full spectrum of industry needs.”
The technical taskforce is hosting a consultation webinar on Oct. 17 for market participants to discuss the recommendations made in the report.
The Accelerated Settlement Taskforce (AST) was set up in December 2022 to examine the case for trades to be settled more quickly in the U.K., and argued for moving to a T+1 standard settlement period.
This and further recommendations of the original AST report, published in March 2024, were accepted by the U.K. government.
KPMG is the secretariat to the T+1 Technical Group.