Settlement risk fears persist for T+1 despite automation uplift
25 November 2025 UK, Europe
Image: zenzen/stock.adobe.com
With a positive step outlook projected in the journey to T+1 in the EU and UK, firms still face a number of challenges ahead of the 11 October 2027 implementation date, according to a survey by The ValueExchange.
The UK & EU T+1 pulse survey was in partnership with the T+1 Accelerated Settlement Taskforce, the Depository Trust & Clearing Corporation (DTCC), Euroclear, and Clearstream.
Feedback from over 350 market participants illustrates the position of the industry in the third quarter of 2025, and how both the UK and Europe are progressing towards an accelerated settlement cycle.
Key findings relating to the UK suggests that 66 per cent of the industry is in ‘project mode’ for T+1 in the UK, which it deems a “positive position” compared with the North American transition this far ahead of the deadline.
While more work is required for the Asia Pacific region to catch up, the UK is on track for a 2027 deadline. Despite this, less than a third of firms are confident that service providers will be ready to support T+1 in the UK.
From the EU perspective, 65 per cent of firms are engaged on T+1 in the region, with EU T+1 project work expected to be completed by the end of 2026, and with counterparty testing planned for 2027.
Following years of investment, the survey names settlement efficiency as the single biggest area of impact for T+1 in the EU.
In terms of the cost differences for implementation, it was found that for the majority of firms in the UK, the move will cost less than US$1 million, whereas in the EU, banks and brokers are due to pay out at least US$2 million.
Commenting on the report, Val Wotton, managing director and global head of equities solutions at DTCC, says: “The UK T+1 Pulse Survey results demonstrate the industry’s strong momentum, but also highlight the need for continued collaboration and investment in automation, operational readiness, and ecosystem-wide alignment.”
Barriers ahead
The survey highlights that 39 per cent of UK firms are already scheduled to miss the 2026 market deadline for confirmations on T+0.
But this is not the only concern with T+1, the UK and EU face increasing the cost of (settlement) risk, with failed trades and penalties also growing.
Unsurprisingly, there is a rise in automation levels within impacted firms, which is particularly focused on settlements and corporate actions.
For instance, over 75 per cent of brokers are looking to increase automation in securities lending, corporate actions, and settlement standard instructions (SSIs) for T+1 in the UK.
In the EU, and for more than 50 per cent of firms, T+1 means automation investments across the entire trade cycle; from onboarding to asset servicing
Other challenges surround custodians, as European market diversity presents itself as a core risk and a likely cost challenge for 69 per cent of these participants.
Looking further afield, middle office, foreign exchange, and funding will be the most impacted functions in North America, according to the UK pulse survey, which suggests North America will be most impacted by the change.
Similarly, the EU pulse survey finds that T+1’s impact is more significant outside of Europe than inside, especially for investors.
A core finding states that the success of T+1 will depend on the strength of the community and global collaboration. The UK survey notes that third-party dependencies are the most critical factors in firms’ preparedness.
While engagement is strong, only 40 per cent of respondents in some of Europe’s major markets are engaged today.
The UK & EU T+1 pulse survey was in partnership with the T+1 Accelerated Settlement Taskforce, the Depository Trust & Clearing Corporation (DTCC), Euroclear, and Clearstream.
Feedback from over 350 market participants illustrates the position of the industry in the third quarter of 2025, and how both the UK and Europe are progressing towards an accelerated settlement cycle.
Key findings relating to the UK suggests that 66 per cent of the industry is in ‘project mode’ for T+1 in the UK, which it deems a “positive position” compared with the North American transition this far ahead of the deadline.
While more work is required for the Asia Pacific region to catch up, the UK is on track for a 2027 deadline. Despite this, less than a third of firms are confident that service providers will be ready to support T+1 in the UK.
From the EU perspective, 65 per cent of firms are engaged on T+1 in the region, with EU T+1 project work expected to be completed by the end of 2026, and with counterparty testing planned for 2027.
Following years of investment, the survey names settlement efficiency as the single biggest area of impact for T+1 in the EU.
In terms of the cost differences for implementation, it was found that for the majority of firms in the UK, the move will cost less than US$1 million, whereas in the EU, banks and brokers are due to pay out at least US$2 million.
Commenting on the report, Val Wotton, managing director and global head of equities solutions at DTCC, says: “The UK T+1 Pulse Survey results demonstrate the industry’s strong momentum, but also highlight the need for continued collaboration and investment in automation, operational readiness, and ecosystem-wide alignment.”
Barriers ahead
The survey highlights that 39 per cent of UK firms are already scheduled to miss the 2026 market deadline for confirmations on T+0.
But this is not the only concern with T+1, the UK and EU face increasing the cost of (settlement) risk, with failed trades and penalties also growing.
Unsurprisingly, there is a rise in automation levels within impacted firms, which is particularly focused on settlements and corporate actions.
For instance, over 75 per cent of brokers are looking to increase automation in securities lending, corporate actions, and settlement standard instructions (SSIs) for T+1 in the UK.
In the EU, and for more than 50 per cent of firms, T+1 means automation investments across the entire trade cycle; from onboarding to asset servicing
Other challenges surround custodians, as European market diversity presents itself as a core risk and a likely cost challenge for 69 per cent of these participants.
Looking further afield, middle office, foreign exchange, and funding will be the most impacted functions in North America, according to the UK pulse survey, which suggests North America will be most impacted by the change.
Similarly, the EU pulse survey finds that T+1’s impact is more significant outside of Europe than inside, especially for investors.
A core finding states that the success of T+1 will depend on the strength of the community and global collaboration. The UK survey notes that third-party dependencies are the most critical factors in firms’ preparedness.
While engagement is strong, only 40 per cent of respondents in some of Europe’s major markets are engaged today.
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