Britain, the European Union, and Switzerland are progressing towards one-day settlement of trades (T+1). Industry-led committees have released a joint testing plan for banks, brokers, and asset managers in preparation for the planned transition in 2027. The three jurisdictions have committed to implementing the T+1 settlement cycle by October 11, 2027.
Financial market infrastructure firms, including Euroclear, Euronext, and Clearstream, are encouraged to facilitate testing for one-day settlement across five windows in 2027. The initial testing period is scheduled for February 1-12, 2027. These testing windows will allow market participants to adapt their systems and processes to the new settlement cycle.
The consultation process involved over 50 market participants, including major financial institutions such as JP Morgan, BlackRock, Morgan Stanley, Barclays, and UBS. This collaborative approach aims to ensure a smooth transition to the T+1 settlement cycle and minimise potential disruptions to trading activities. The move aligns with similar changes already implemented in the U.S. and Canada, which adopted a one-day settlement cycle in 2024.
T+1 shortens the settlement time for securities transactions, reducing counterparty risk and improving market efficiency. This change necessitates adjustments across the financial industry to accommodate the faster settlement timeline.
