Frequently Asked Questions
General
How is AST going to engage with the industry on derivatives?
AST is setting up a workstream to assess the impact of T+1 on derivative instruments. Progress will be reported as part of our regular update cycle to industry.
What is the plan regarding BACS? A lot of Unit Trusts use BACS to settle redemptions and BACS is T+2/T+3
Concerns about the BACS 3 day clearing period were laid out in ENV12 on page 41 of our final implementation plan: https://acceleratedsettlement.co.uk/wp-content/uploads/2025/02/AST-Final-report-Feb-202581.pdf
We are currently finalising the workstreams to carry out further work such as this. Progress will be reported as part of our regular update cycle to industry.
There is no final decision on digitisation/dematerialisation which is intrinsically linked to T+1 settlement. Do we now have any steer on if/how and when the removal of certificates from the marketplace will happen?
The dematerialisation requirement from EU CSDR, Article 76(2), was not transposed into UK CSDR. The AST considers that the only UK CSDR amendment needed for the implementation of T+1 settlement in the UK is to Article 5(2). Article 5(2) pertains to shares traded on UK trading venues and does not affect the transfer of share certificates, which are typically not traded on trading venues.
The final report from the Digitisation Taskforce is anticipated this year and the AST will evaluate it for any implications the modernisation of the shareholding structure in the UK might have on the T+1 roadmap, including the interaction of the deadlines and investment requirements associated with the two programmes.
Which trade/ transactional scenarios should be confirmed today as per UK Regulation?
This is a question that participants should ask their compliance department. The Taskforce’s view is that everything you confirm today, needs to be confirmed tomorrow.
The Implementation Plan refers to "Electronically using a recognised industry standard and corresponding data dictionary" - What are these data dictionaries and who will provide guidance on them?
The workstreams discussed industry standards in terms of protocols, models and platforms. Protocols include: ISO 15022 (MT messaging); ISO 20022 (MX messaging) and Financial Information eXchange (FIX) messaging. Models cited include: Common Domain Models (CDM). Platforms include: participant and market infrastructure-owned platforms. The consensus was that industry standards are either maintained by industry association / registry body (e.g. ISO, ISDA, ICMA, ISLA, ISITC, SMPG) or by the platform provider themselves.
Discussions also identified that new standards are anticipated for example as part of digitisation initiatives. In summary, the response to the question is that data dictionaries and guidance for a recognised industry standard are provided by your industry association, market practice group, registry body or the platform provider.
I was concerned to see the percentage of respondents to the ValueExchange survey who do not think they need to do anything. Does the AST need to step up education? Or work with participants to educate?
From the start, the AST leadership and its members have been clear about the need to automate and the need to build automation capabilities as soon as possible. Equally, the AST has been clear that a powerful communication tool is the cascade of information from the AST to AST members to tell their clients and for those clients to tell their clients and so on.
The AST presents at multiple industry events and events hosted by market participants for their clients as well as distributing information via quarterly reports, a dedicated T+1 LinkedIn page, interviews and thought pieces in the trade press. These are all designed to provide space to discuss T+1 progress and developments and raise awareness of the need for preparation.
The AST also has a dedicated website, acceleratedsettlement.co.uk, which hosts an FAQs page where market participants can submit any question on any topic related to T+1 or to the AST and then displays our answers to these questions. The website has an events calendar to highlight the various events at which a member of AST will be speaking and also include registration details for these events where applicable.
AST is always looking for new ways of engaging with the market and recently established a quarterly implementation forum which kicked off in June and serves as a further forum to answer questions to help the market with implementation.
We would be very happy to receive new ideas to increase the flow of information.
How do you secure alignment with Europe and Switzerland?
We are working closely with the EU and CH taskforces to ensure a harmonised approach is agreed. For example, AST leads are also actively involved in the relevant EU taskforces. The chairs of all taskforces are also in regular contact and will continue to actively engage with each other and the market.
What is the market practice for debt new issuance? (SETT11a)
Debt new issuance is not subject to T+1. However, once admitted into trading, it becomes eligible for settlement on T+1.
Is email a recognised method to communicate allocation data between participants?
A core focus of the industry guidance is committment to automation. Whilst the use of email represents a method of electronic communication, the term ‘email’ does not stipulate the content and or structure of the data that is communicated.
Usually, the use of ‘email’ infers a manual process, or manual activities. However, it is understood that some participants offer automation related to data sent via email where a counterparty can facilitate straight through processing using corresponding structured data. This scenario which includes ‘email’ could be deemed an acceptable method between counterparties. In summary, the consensus is that email is not a recommended method. However, certain participants may support or tolerate its usage as long as it is automated as part of straight through processing.
Scope
What convention should apply to securities listed in multiple venues in different jurisdictions?
The matrix in the AST Technical Group report (pg.23-25) lays out all the different permutations that need to be considered, including where market conventions apply. As a general rule, for securities listed on trading venues in non-UK jurisdictions, the settlement cycle convention should be relative to the final settlement location.
Will T+1 be the standard for physical deliveries resulting out of UK stock options?
Generally speaking, yes, we expect this to be the case as T+1 becomes the standard settlement cycle across the UK as of 11 Oct 2027. However, further analysis is still required regarding the impact to the listed derivative workflow.
Will the taskforce be considering defined testing windows, similar to what the US and Canada implemented?
AST is currently working with Euroclear UK and International (EUI) to create a testing timetable for participants in UK markets that will allow end to end testing in 2027. We expect to publish the details of this timetable to participants by the end of 2025, to allow them to create their own testing plan.
Settlement
Can you explain how you arrived at the 5:59am deadline?
The AST Settlement workstream looked in detail at the instruction cut off times. Today, the expectation is that fully matched instructions will be input into CREST by 20.00 UK time on T. As part of the migration to T+1, CREST will extend this deadline to 21.00 and the expectation is that UK domiciled participants will adhere to this deadline.
In recognition of the fact that international investors are critical to the UK market, we also identified a second instruction deadline to enable such investors, particularly those in APAC to have time to complete their settlement requirements during local working hours. This led to the creation of the 05:59 UK time on T+1 instruction deadline, intended for use only by non-UK domiciled market participants.
For Broker-to-Broker flow of in-scope instruments where allocations and confirmations are not carried out, how does SETT 01 apply?
SETT01 does not apply to transactions where participants are not required to allocate or confirm today. However, UK AST would recommend that you perform a reconciliation of your transactions to ensure that you are allocating and confirming appropriately with your clients and counterparts.
What if my counterparty won’t comply with SETT 01 e.g. what if they are unable to confirm electronically? Must I stop doing in-scope business with them or am I able to track them/ follow up with them/ encourage them to comply?
The code of conduct, as defined by market participants during the recommendation development phase, sets out a series of expectations of all market participants. As laid out in our kick-off event on 20 February 2025 by the FCA, the expectation is that all market participants will comply with these recommendations, especially the twelve identified as critical which includes SETT 01.
We expect that all market participants will reflect on this guidance and endeavour to comply with these recommendations in order to increase the overall operational efficiency of UK markets. In this regard, the support of participants in informing and educating their counterparties on this requirement would be welcome.
For prime brokerage clients that provide instructions late on T+0, what is the UK industry guidance on how to deal with this if the client is unable to meet the cut-off time?
The code of conduct, as defined by market participants during the recommendation development phase, sets out a series of expectations of all market participants. As laid out in our kick-off event on 20 February 2025 by the FCA, the expectation is that all market participants will comply with these recommendations, especially the twelve identified as critical which includes SETT 01.
We expect that all market participants will reflect on this guidance and endeavour to comply with these recommendations in order to increase the overall operational efficiency of UK markets. In this regard, the support of participants in informing and educating their counterparties on this requirement would be welcome.
What happens at CREST if my instruction is late, i.e submitted after 05:59 am on intended settlement date?
Settlement instructions submitted after the 05:59 deadline that match ones from counterparts (i.e. are input second) will be subject to CREST’s matching discipline but will still be assessed for settlement.
What is auto-shaping? Can you please explain? Also, what is the difference between auto-shaping and auto-partialling?
Auto-shaping and auto-partialling/splitting are two separate functions that occur at different points in the transaction life cycle. Auto-shaping occurs before or as the transaction is input into the settlement system, whilst auto-partialling/splitting typically occurs after the transaction has been matched. Both are viewed as improving settlement efficiency.
Auto-shaping is the ‘breaking down’ of a single large trade into smaller, pre-agreed, standard-sized settlement instructions (‘shapes’) that are sent into the settlement system for matching and settlement. This is typically used in fixed-income transactions. Therefore, a large trade of £150 million could be ‘shaped’ into three instructions to the settlement system of £50 million each. This ‘shaping’ reduces the liquidity/credit requirement for the settlement of each ‘shaped’ transaction and increases the flow of the security around the settlement system, maximising the amount of settlement that occurs and improving settlement efficiency.
In contrast, auto-partialling or splitting is the process of dividing a single matched transaction where there are insufficient securities available to settle the transaction. The single transaction can be partialled/split into a portion that can settle using the available resources. The unsettled portion will settle or be further partialled/split in the future as resources become available.
The use of partialling/splitting increases the liquidity of securities within the settlement system by maximising the amount of settlement that occurs, improving settlement efficiency.
Corporate actions
What do we mean by ‘all UK trading venues’? Is it regulated markets or does it include MTF, Systemic Internalisers etc (COAC1a/b)?
Regarding CoAc 1a/b, it was agreed that the scope should cover UK Trading Venues only. MTFs and Systemic Internalisers base corporate action entitlement on the key event dates, which are driven by the rules set by exchanges on issuers.
Trading and Liquidity
If the UK gets an SFT exemption and the EU does not, what complexities do you foresee?
We are working closely with the EU and CH taskforces to ensure a harmonised approach is agreed.
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