Taskforce calls on EU, UK and Switzerland to align on T+1

A European task force has called on the EU, UK and Switzerland to coordinate their implementation of a shortened settlement cycle.

The call comes in the wake of the UK’s announcement that it will move to next day settlement (T+1) by 2027.

The European T+1 Taskforce, which comprises buy and sell-side firms and market infrastructure providers, was established in 2023 with the mission of minimising the impact of the move to T+1.

Europe’s T+1 dilemma

In its statement, the taskforce welcomed the UK’s plan that stated if the EU commits to T+1 in a timeline that aligned with its own, then simultaneous adoption could be considered.

The discussion of a shortened settlement cycle has come on the back of the US market’s decision to adopt T+1 by May 2024.

This has forced the EU, UK and Switzerland to look at aligning to the same cycle or else risk costly lags in securities trades.

Esma calls for evidence on shortening settlement cycle

The taskforce is therefore looking to ensure some collaboration between the respective regulators in order to reduce any possible disruption.

“We anticipate that alignment of dates will reduce the complexity of implementation projects for firms active across multiple jurisdictions, and minimise scoping issues related to instruments listed, traded and settled across geographical Europe,” the European task force said in a statement.

“Our shared ambition is for a low-cost, efficient, safe, resilient and integrated post-trade environment which supports globally competitive European securities markets, with high levels of automation and standardisation.”

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