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.

Will the removal of paper share certificates, following the publication of the UK’s Digitisation Report, have any impact on the transition to T+1 settlement?

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 directly affect the transfer of share certificates, which are typically not traded on trading venues.

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.

What are the biggest challenges to implementation?

There are 2 principal challenges. Communication and automation and all firms have a role to play in helping address each.

1. Communication: Everyone needs to know about the move to T+1 and even today, we should not assume that everyone does. Given that each participant is a single link in a post-trade chain, all of which needs to be able to operate efficiently and in compliance with T+1 reduced timeframes, each participant should not only be working on their own compliance, but also discussing the compliance capabilities of their upstream and downstream partners. If everyone is aware of what needs to be done, we will collectively find compliance easier. Passing problems down the chain simply makes it harder for everyone in the chain to meet the target.

2. Automation: The continuing thread from launch of the Implementation Plan in February 2025 until now is the need for automation. The loss of 80% of today’s processing time leaves a very short time for exception management and so reducing the number of exceptions is critical. This is achieved by automation to ensure the correct data is in the correct place at the correct time. Post go-live research in the US revealed that firms that failed to automate experienced anything up to an 18% increase in their back-office staffing costs. This is not a sustainable solution.

What is the AST view on T0, tokenisation, implementation of DLT based solutions etc?

It is clear that the global direction of travel in post-trade is towards the implementation of shorter settlement cycles for all the cost and risk reduction reasons identified when originally looking at T+1. As a result, it is safe to say that T+1 is in reality, a stop along the way to T0 and increased flexibility in post-trade processing that will be enabled by digitalisation.

At this point, the when and the what of the potential end state of global markets generally and post-trade processing specifically is not yet clear. However, one fact that is already known is that future markets will rely heavily on automation and automation of processes now will provide long term benefit in terms of future proofing participant systems.

The level to which a participant will need to automate will be determined by the current level of automation, or not, that any particular participant has already implemented. So the AST is not in a position to speculate as to how specific participants will need to prepare for T+1 or beyond.

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?

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.

Will there be any changes to dividend claim processing at CSD level?

The CSD currently generates claims for 5 days post record date. The working group recommends this should not be condensed considering the shortened settlement cycle.

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.

What is being done about the fund management creation and redemption/cash cycle misalignment - it is current market practice for this to be T+3 vs T+2 for the underlying equity. What will happen post T+1?

In May 2025, the IA, PIMFA and AIMA published a joint recommendation to the industry that post T+1, the participants align their creation/redemption timeframes on a T+2 cycle to allow greater alignment with the T+1 equity settlement cycle. It is now the responsibility of the industry participants to adopt and implement this market practice.

Stock lending

What is the industry stance on the future state of SLOs and the subsequent creation of the SLRs in CREST (i.e., are they looking to move the SLR creation to the same day as the SLO) as some people today can use the DEL transaction type to return the stock same day if required?

The full detail of the current status of SLO/SLR market practice proposals was published by ISLA on their website on 30/10/2025 and can be found here.

For convenience, we have summarised it below:

By June 2026, ISLA are aiming to update industry market practice supported by any necessary CREST process and procedural change, to allow same day (T0) Stock Loan Opens (SLOs) and Stock Loan Returns (SLRs) including collateral movements where both lender and borrower agree.

Under this new approach, CREST will still create the SLR when the SLO settles, but same-day returns will not settle automatically. Instead, they will default to priority for both Lender and Borrower, whereby both parties must agree to manually raise the priority to approve same day settlement. On T+1, CREST priorities will reset to normal levels.

Operationally, same-day returns will not resolve existing billing accrual challenges since most systems calculate fees on end-of-day positions. Lenders may therefore need system changes or manual workarounds for intraday accruals as a result.

Collateral transactions will continue using the same SLO/SLR types for now, with new transaction codes CLD (Collateral Deliver) and CLR (Collateral Received) to support same-day collateral returns under “CREST 2.”

Borrowers will not be able to unilaterally trigger same-day returns, they will require lender authorisation. Triparty agents have already reviewed the system changes necessary to support these workflows.

Overall, the change aims to support same-day settlement for underlying borrows, loans and collateral movements, maintain lender control, and modernise CREST stock loan and collateral operations ahead of the Q2 2026 go-live.

The use of DEL for SLOs and SLRs is not recommended by either ISLA or CREST.

If agent lenders instruct sale transactions into the market after the T+1 05:59am deadline set by the AST T+1 recommendation Set 02:00, would they be in breach of the code of conduct?

Yes. However:

If a lender (including lending agents / lending intermediaries) instructs a loan with a zero priority and the borrower matches their instruction, CREST will not settle the trade until the lender raises the transaction priority above zero.
This uses the existing CREST ‘hold and release’ functionality to allow lenders agents/intermediaries to send instructions in compliance with the code of conduct 05:59am on T+1 deadline.

Why might agent lenders struggle to release settlement instructions to CREST by 05:59am on T+1 actual settlement date?

Several reasons contribute to this challenge:

Omnibus Structured Account Setup: Agent lenders operating omnibus accounts must ensure that underlying beneficial owners have sufficient settled holdings before releasing delivery instructions. This dependency can delay trade release.
Late Sale Notifications: Sales that trigger securities recalls may be communicated late in the day, especially in markets with concentrated end-of-day liquidity. This leaves limited time to issue timely recalls and process returns.
Early Cut-off Time: The 05:59am cut-off time falls outside standard operating hours for many agent lending platforms and service providers, increasing reliance on automation and exception-based processing.
Asset Reallocation: Generally, client sales of assets on loan are resolved through reallocation of loans (e.g., to other lending clients). Where reallocation is not possible, delivery cannot proceed.

Is this the end of sec lending at its current levels?

Securities are borrowed to support short selling, to source collateral, and to prevent or resolve settlement failures; none of these fundamental drivers disappear with T+1. Trading and collateral-driven borrowing should continue broadly unchanged, while the compressed settlement window may actually increase borrowing to avoid fails and fail-funding costs as firms adapt their processes. Over time, greater automation and inventory management are expected to support stable or higher lending activity rather than a structural decline.

The point that needs clarifying is to what extent we should make preparations to facilitate timely recalls. For example, we do not actively lend government bonds or other securities (repo or otherwise). However, our PB agreement allows rehypothecation of the securities we custody. We have no visibility on rehypothecation and so it’s difficult to know in advance if securities are being lent out. We notify our PB on trade date when we have sold a security and match trades in a timely fashion. Are there any other best practices you see that we should align ourselves with on this point?

Where an investment firm does not operate a direct securities lending or repo programme but permits a prime broker to rehypothecate assets, the industry expectations supported by the UK regulator around “preparations to facilitate timely recalls” is met primarily through ensuring that long sales (long inventory position that typically a hedge fund will own outright) can settle on time, even where positions have been rehypothecated.

In this model, the firm’s responsibilities typically include instructing and matching sale trades on trade date; providing the prime broker with prompt, reliable visibility of long sales; and performing oversight to gain comfort that the prime broker’s rehypothecation, inventory management and recall processes are compatible with T+1 settlement of client transactions.

Good practice would generally be to: obtain and periodically review the prime broker’s documented procedures for substituting collateral when a rehypothecated long is sold and for recalling stock lent or repo’d out for its own account; agree operational cut‑off times and escalation paths for late or large sales, including hard‑to‑borrow names; and monitor settlement efficiency to confirm that the prime broker’s arrangements work effectively in practice. In this way, the firm can demonstrate that it has taken reasonable steps to support timely recalls and settlement, consistent with the market’s expectations under T+1.

This is a good example of the interlinked nature of settlement, where your compliance with market practice is dependent on the capability of another party, the PB in this case, and you must therefore be aware of that party’s ability to support your T+1 settlement obligation.

FX

What work are you doing around Foreign Exchange in preparation for T+1? It’s a huge piece that is often an after thought

FX is included with the UK AST Final Report, and we have also published an ‘Expert Series’ webinar and supplementary paper to aid market participants in all jurisdictions with their preparation.