T+1 Technical Group Publishes Interim Recommendations on UK’s Accelerated Settlement Transition with a call for feedback from market participants

The T+1 Technical Group (TGT) of the UK Accelerated Settlement Task Force (AST) has outlined its proposed recommendations for implementing the UK’s transition from T+2 to T+1 securities settlement.

The draft recommendations will be open for consultation with all participants in the UK equity market until 31 October 2024.

Financial markets globally are increasingly moving to shorten the settlement cycle from two days after the execution date, to just one day after execution, in what is known as a T+1 settlement cycle.

This will create faster, more efficient settlement bringing operational efficiencies from the required automation and reducing risk and is expected to become the global standard within the next five years.

The UK government has committed to the transition to T+1 settlement, bringing equity settlement in line with that of Gilts, by 31 December 2027 as laid out in the ten recommendations of the original AST report, chaired by Charlie Geffen, published in March 2024, all of which were accepted by the government.

This interim report sets out draft recommendations for implementing the transition to T+1, split across key focus areas for market participants, including the importance of automation and adherence to market practices, and requests feedback via an integral consultation.

The final report Incorporating stakeholder feedback is expected in December and will set out the final recommendations, including the transition timing and sequencing of recommendation implementation, as well as providing interactive tools to help firms plan their transition based on relevance and timelines

Andrew Douglas, Chair of the T+1 Technical Group, said: “This interim report is a key milestone in the UK’s journey to T+1 settlement and I’d like to extend my gratitude to all those involved in crafting this report and providing the depth of industry expertise needed to shape these draft recommendations.

“As an independent, inclusive working group, supported by the public authorities, I’m calling on all market participants to engage in this consultation so that together we can ensure the final recommendations for implementation reflect the full spectrum of industry needs.”

Read the full interim recommendations here.