The European Union (EU), Switzerland and the UK have set October 11, 2027, as the go-live date for T+1 settlement of security transactions, i.e., the settling of trades one business day after the trade date. To be sure, the three are already behind the curve. The world’s largest market, the US, transitioned in May 2024.

We believe the long overdue shift is a critical financial market reform for the trio, given that speed is increasingly dictating market dynamics and the fact that the technology infrastructure is already available to support the transition.

The frameworks are being finalised

While October 11, 2027, might still seem some distance away, there are considerable issues that need to be addressed.

In the EU, the European Securities and Markets Authority (ESMA), the European Commission and the European Central Bank introduced a new governance structure on January 22, 2025, on the T+1 settlement cycle to oversee and manage operational, regulatory and technological aspects of the transition.

Key elements of the new governance model are:

• Setting up an industry committee with representatives from each market player. 
• Implementation of several technical workstreams focusing on required operational adaptations (trading, matching, settlement, securities financing, funding and FX management) 
• Formation of a coordination committee to oversee the coordination between the authorities and the market players

ESMA has also recommended:

• October 11, 2027, as the optimal date for transitioning to T+1
• Migrating all instruments to a T+1 settlement cycle at once

In February 2025, following technical advice from the ESMA, the European Commission formally proposed legislative changes to amend the Central Securities Depositories Regulation.

An EU T+1 industry taskforce, co-led by the Association for Financial Markets in Europe and key EU regulators, is steering the transition through 12 focused workstreams, ranging from trade matching to FX alignment and securities lending.

The UK is moving swiftly as well. It has formed a technical group, the Accelerated Settlement Taskforce, which submitted its final recommendation in February 2025, endorsed by His Majesty’s Treasury, the Financial Conduct Authority and the Bank of England. It includes the 12 critical operational actions and 26 highly recommended actions, along with five behavioural commitments.

And Switzerland is coordinating its T+1 transition with the EU and the UK, aiming for a synchronised implementation. The Swiss Securities Post Trade Council (swissSPTC) is working with EU and UK counterparts to harmonise technical standards and timelines. In case of delays, Switzerland will adjust its timeline to maintain alignment. The SIX Swiss Exchange is updating its systems as well, and the swissSPTC task force is conducting technical assessments with European industry groups to ensure interoperability.

Lessons learnt from the US

Prior to the implementation of T+1, the authorities had to ensure:

• Development and automation of systems to reduce manual errors and process
• Configuration and batch adjustments, and need for real-time data feeds
• Process optimisation, and creation of dashboard-based metrics for real-time reporting and issue identification to avoid bottlenecks
• Communication, education and training for clarity, readiness and collaboration
• Business continuity planning and worst-case industry-wide testing

So, why have the EU, the UK and Switzerland’s T+1 settlement transitions been delayed?

In the case of the UK, the transition to T+1 settlement was delayed on concerns with regard to global alignment, operational readiness and FX funding constraints. Despite Brexit, London remains a global trading hub, and a rushed move could have increased settlement failures-especially for cross-border and non-GBP trades. Also, unlike the US, the UK market is less automated, with a more fragmented infrastructure and manual processes. Hence, the government and industry have recommended a cautious, phased approach to ensure systemic stability and protect London’s competitiveness.

Switzerland is committed to a joint migration with the EU and UK to maintain alignment. The country is a hub for global private banking and wealth management. The high cross-border asset servicing, particularly involving the EU and the UK, could upend the ‘follow-the-sun’ operations model, leading to settlement failures and exceptions. 

Banks and firms need to prepare

Transitioning to T+1 is a significant step and requires banks to invest in new ways of working, both internally and with industry partners.

Also, firms should aim to define phases with key milestones, e.g. elimination of manual touch points, upgradation of technology, engagement with stakeholders, alignment with regulations, etc, along with scoping priorities, setting budgets and assessing the changes required to meet interim milestones.

The objective should be to transition most of the processes, such as trade allocations, confirmations and matching to T+0, while leaving settlement and failure resolutions to T+1.

How Crisil Integral IQ can support

Banks and firms must act now to ensure readiness by the go-live date.

The focus should be to start early, automating post-trades, aligning cut-offs with partners and monitoring custodian readiness.

Crisil Integral IQ has the deep set of capabilities to not only support the transition but also ensure all issues are continually tested prior to go-live.

Our understanding of the evolving regulatory landscape helps clients navigate market complexities with confidence as well.

Sources: 
T+1 Settlement Update: Commission proposes change to CSDR - Arthur Cox LLP
EU_T_1_Industry_Committee_-_Composition.pdf
https://acceleratedsettlement.co.uk/publishes-final-implementation-plan/