T+1 panel discussion
20 Aug 2025
Industry experts discuss the upcoming move to faster settlement, and if T+1 is simply a precursor to T+0
Image: irham/stock.adobe.com
Panelists
Craig Stirling
Synergy Securities Product Owner, AccessFintech
Silvia Sancin
Senior Custody Solutions Manager, BNP Paribas
Simon Waddington
Head of Post-Trade & RegTech Solutions, EquiLend
Tom Casteleyn
EMEA Head of Custody, J.P. Morgan
Alex Dock
Head of Custody Industry Development, J.P. Morgan
Gabino Roche Jr.
CEO and Founder, Saphyre
With the October 2027 deadline rapidly approaching, what are the most critical technology infrastructure upgrades custodians must prioritise to ensure seamless T+1 implementation? How are you balancing the need for system modernisation against the operational continuity requirements during this transition period?
Silvia Sancin: To address the level of complexity of this change, we believe that custodians must consider the entire trade lifecycle — from account creation to settlement of a trade — and foster collaboration across all their divisions. Custody, risk, compliance, funding, middle office services, transfer agent, fund accounting — every product and service is embedded into our governance.
With clients at the heart of our business, we have dedicated streams to review bespoke impacts and continuously engage with our clients to socialise any change they may experience. We have identified two key areas where we are strategically concentrating our priorities for the benefit of our clients:
Operational efficiencies: We are actively working with clients to eliminate friction points and legacy processes, and implement automation wherever feasible.
Non-standard events: We are focusing on scenarios that test the resiliency of our platforms, including public holidays, double settlement days, outages, and other exceptional events that may impact our systems. By addressing these areas, we aim to demonstrate the robustness and reliability of our platforms, even in unusual or challenging circumstances.
The transition to T+1 settlement in Europe offers a valuable chance for us to validate the effectiveness of our follow-the-sun model, which is designed to provide uninterrupted support to our clients across different time zones. As the settlement cycle is shortened, we recognise the importance of delivering critical support during peak European market hours, ensuring that our clients’ operational needs are met and that they can navigate the transition process with confidence.
Tom Casteleyn: As a global custodian, we operate in over 100 markets, many of which have moved to T+1, most notably the US in 2024, but also India, Mexico, and Argentina, or are considering doing so, like Japan and, most recently, Hong Kong. That allows us to leverage the expertise and system upgrades from these prior market moves to accommodate the EU, Swiss and UK transitions to T+1 rather than starting from scratch.
This being said, the sheer scale and complexity of the European markets, the breadth and diversity of the financial market infrastructure (FMI) landscape, most notably the central securities depositories (CSDs) alongside TARGET2-Securities (T2S), require a unique focus. It is also important to remember that international central securities depositories (ICSDs) are part of the EU transition meaning Europe’s move to T+1 is truly global in terms of impacts.
This is why, over the last two years, we have been actively engaged in industry committees and workstreams to ensure the recommendations in February’s UK Accelerated Settlement Taskforce (AST) T+1 Implementation Plan, and more recently the EU T+1 Industry Committee High-Level Roadmap, reflect the views and specific requirements of industry representatives such as custodians, asset managers, and buy and sell side clients.
In terms of infrastructure upgrades, the most critical developments are geared towards ensuring our systems can withstand the velocity of settlement instructions being transmitted through our systems in a shortened timeframe (experience from the US indicates that we are already are able to this); working with clients to ensure that upstream confirmation and allocation systems can process trades throughout trade date; ensuring settlement instructions are sent using straight-through processing (STP) to the right CSD; and enhancing data management capabilities, such as standard settlement instructions (SSI) management, to meet the instruction cut-offs for T+1 settlement.
In addition, there are a number of other developments to enhance the processing of asset servicing events, the timely recall of stock loans, enhanced FX solutions, funding, etc.
Needless to say, we are ensuring that all these enhancements are adequately managed and tested, and we have a dedicated and firm-wide programme structure in place across J.P. Morgan to that end.
Craig Stirling: Technology platforms need to be real-time, market and asset class agnostic, and interoperable with other data providers and relevant vendors.
From a pre-matching perspective, trade exception queues across multiple jurisdictions need to be minimised through improved STP, reducing redundant exception creation and automated remedial actions, both strategic and tactical. By using a financial data hub like AccessFintech, clients can view a consolidated consistent view of the world across providers, while retaining best-in-class system resiliency and redundancy.
Gabino Roche: Most large custodians still rely on decades-old, acquisition-patched core systems. They have learnt to ingest client data in their proprietary formats, but that ‘custodian-specific standardisation’ breaks down under T+1 because it does nothing for real-time, bidirectional interaction with buy and sell side clients.
To achieve true real-time collaboration you need interoperability, and interoperability starts with an intelligent data-normalisation layer that serves both the custodian’s internal systems and every external counterparty.
The fastest, lowest-risk route is to provide that layer as neutral cloud infrastructure delivered via Software as a Service (SaaS) — rails that are independent of any one firm.
That is precisely what Saphyre offers:
We capture and ‘remember’ reference data — legal entity identifiers (LEIs), place of settlements (PSETs), SSIs, fund and sleeve-level mappings — from multiple standards and counterparties.
We expose that data through a self-service, permissioned model so each party sees only what it is entitled to see, yet everyone operates off the same golden copy.
By normalising and validating data up-front, we eliminate manual exceptions, accelerate trade affirmation on trade date, and let legacy custodian cores meet T+1 cut-offs without a ‘big-bang’ rewrite.
In short, custodians do not need to rip out their mainframes; they need a smart, cloud-native overlay that speaks every standard for them and their buy and sell side clients, in real time. Saphyre is that overlay.
Given the coordinated UK-EU T+1 timeline, how will custodians manage the operational complexities of cross-border settlement, particularly regarding time zone differences and the compressed settlement window? What specific challenges arise when handling transactions across different regulatory jurisdictions under accelerated settlement?
Stirling: Availing of systems and infrastructure that are CSD-agnostic becomes a critical need to ensure ready access to data and the relevant insights.
We do this through AccessFintech’s SynergyIQ, which provides insights on both parties’ instructions irrespective of where they are alleging. This aids both cross-border transactions, as well as showing where there are PSET differences. Making these insights visible real-time simplifies the remediation of these exceptions as the action is clearly defined without manual investigation.
Roche: Custodians have traditionally organised operations by jurisdiction — each desk ticking off a local checklist of reporting, matching and settlement deadlines.
Under a coordinated UK-EU move to T+1, those siloed workflows collide with three new realities:
Time-zone compression: A UK-executed trade booked at 17:30 BST must be enriched, affirmed, and released to an EU CSD often before 18:00–19:00 CET on the same calendar day. That leaves minutes, not hours, for exception handling.
Fragmented rule books: While the UK and EU aim for a common settlement date, they retain different CSDR penalty regimes, cut-off times and hold/release controls. Custodians must validate each instruction against the right rule set and still maintain a single golden record for clients.
Cross-border data choreography: Securities may move from CREST to Euroclear Bank or Clearstream; cash may settle via TARGET2 or CHAPS. Each leg uses a different message flavour (ISO 20022 MX versus legacy MT), different settlement statuses and different reporting obligations.
Sancin: We know that the complexity of the European market structure presents challenges for harmonisation, particularly when it comes to cross-border transactions. In this context, we believe that an efficient completion of all pre-settlement processes is key. Automated exchange of allocation, confirmation and same-day trade matching are vital to enable the efficiency needed with the compressed timeline. Furthermore, cross-border settlement and its specific challenges can be overcome thanks to efficient SSIs management and the foreseen usage of automatic messaging protocols used by all counterparties that maintain their golden source data in the same database to eliminate frictions and reduce the need for manual intervention as well as the risk of delay and errors in the settlement chain.
Alex Dockx: Given the complexity of EU post-trade market infrastructures, with many exchanges, CCPs, CSDs, the ICSDs, plus T2S, cross-border (or rather cross-CSD) settlements are by necessity more complex than in a single integrated market like the US or the UK. This is also why there was a lot of focus in the industry task forces on measures to streamline these cross-platform movements.
Within J.P. Morgan, we are making substantial developments to enrich settlement instructions with identifiers such as the place of settlement and safekeeping.
In all of this, we keep a close eye on our international investor base, especially our clients who are operating out of Asian time zones, as they will no longer benefit from an extra day ahead of settlement to repair any errors. Reporting will be key so that they can manage and remediate ideally before the start of the European day.
When it comes to regulation, there is not a global settlement standard, so each migration to T+1 needs to align with the specific regulatory and market requirements for that particular jurisdiction. For EU and UK T+1 that is Central Securities Depositories Regulation (CSDR), and the requirements apply to any party transacting in the region’s markets regardless of their domicile. In theory, there should not be any cause for divergence between how different EU member states and CSDs implement T+1, but close attention to how this happens in practice is required.
The compressed settlement cycle inevitably increases operational pressure and reduces time for manual intervention. How are custodians redesigning their exception management processes and fail management procedures? What contingency measures are being implemented to handle settlement failures in a T+1 environment?
Casteleyn: There are a number of other developments required from brokers, investors, custodians and other intermediaries, to streamline the execution to settlement flow and to avoid impact on the matching process, as there will be limited time for exception management ahead of settlement date.
The key is to do what is done on T+1 today, which will now become the intended settlement date, on trade date itself, and that includes real-time confirmations and allocations so settlements can be generated and matched ahead of settlement date, proactive inventory management, reviewing funding arrangements, etc.
We do not want to see more fails in a region which has worked so hard, post-CSDR, to improve operational processes. However, we need to be prepared, and proactive fails management will be essential.
We are also further enhancing our exception management handling functionality, including reviewing existing automated exception handling tools to ensure they are able to scale and quickly identify and resolve issues as close to real time as possible. This will include creating automated alerts and escalation protocols, to address settlement matching exceptions and failures promptly.
It will be important for the entire industry to reduce any reliance on manual intervention, and we will be leveraging our data analysis and fail prediction tools to identify where STP breaks down, to make targeted improvements internally, where required, with our clients and our sub-custody and CSD partners.
Roche: As per the three realities I cited in the previous question, market infrastructure like Saphyre tackle these challenges in the following ways:
Challenge 1: Synchronising cut-offs across time zones — most custodians hire follow-the-sun teams and add hand-offs which are costly and error-prone. Market infrastructure addresses this by pre-populating client data for trades in real time. Our platform ‘remembers’ LEIs, SSIs, PSETs and fund mappings, so instructions can be auto-enriched as part of the trade or post-trade processing with no manual enrichment at 17:30 BST.
Challenge 2: Reconciling divergent rule sets — most custodians hard-code multiple rule engines inside legacy systems, which require nightly quality assurance test cycles.
Market infrastructure externalises rules and even maintains the reference data by the custodian’s respective clients. Saphyre tags each counterparty, market and asset class with its regulatory attributes, letting custodians validate and route instructions dynamically without rewriting their code (or even COBOL).
Challenge 3: Managing cross-CSD messaging — traditionally custodians would run parallel MT and MX interfaces and maintain bespoke translation tables.
Again, a SaaS-based solution provides a one-normalised data fabric. Ingesting and outputting MT, MX, FIX, or API calls interchangeably, so a single ‘golden copy’ feeds both the UK and EU legs while keeping message syntax compliant.
Challenge 4: How to perform exception handling in minutes, not hours — custodians throw more staff at post-trade queues
With an intelligent, SaaS-based platform, proactively flagging, exceptions are surfaced directly to the custodian’s buy and sell side clients while providing them an authenticate, secure real-time interface to resolve the issues without callbacks. Static data exceptions are eliminated because the data is maintained directly with the clients, again in real time.
Sancin: Indeed, the operational pressure will increase with T+1, and this was true also when the US market moved to T+1 back in May 2024. At BNP Paribas, our integrated banking model is a great strength. With products and services ranging from execution to clearing all the way to custody, we are able to quickly mobilise all businesses and validate the full end-to-end flows both operationally and functionally. This is a critical success factor to reduce the manual processes and therefore the need for human intervention.
Having said that, our exception management is already today a very robust process which provides real-time information about trade statuses to our clients, both via SWIFT messages and via our web portal. However, we think a faster turnaround on exceptions will be paramount, allowing for prioritisation of outstanding items to meet the new timelines. This is an aspect all custodians will have to prioritise in their to-do list.
Stirling: By producing exception queues limited to actionable items through tools like SynergyIQ, custodians are already benefiting from focused, prioritised workload management.
This reduces operational effort in the pre-matching space by approximately 90 per cent as ‘no value add’ unmatched transactions are made redundant. Organisations may look to introduce contingency measures such as temporary headcount increases, but a robust, data focused, strategic solution is typically the end goal.
What steps are custodians taking to ensure their institutional clients — particularly asset managers and pension funds — are adequately prepared for T+1? How are you addressing varying levels of client readiness, and what support mechanisms are being put in place for clients requiring additional assistance?
Stirling: AccessFintech has created a STP workflow to facilitate partialling at scale in markets where the CSD or local agent do not facilitate auto-partials. Utilising this functionality can significantly reduce clients’ unencumbered assets and improve their balance sheet and P&L. This is one of the key areas in which we are seeing custodians support their institutional clients.
Alex Dockx: The US move to T+1 has shown that close collaboration with FMIs, industry partners, and investors is key to success. This is why, as a trusted partner, we have already introduced a comprehensive client outreach programme to assist and guide our clients in their preparations.
To date, we have already hosted webinars, and intend to leverage the formula we used for the US migrations which included podcasts, webinars, FAQs, articles, and roundtables.
As we always find in large change programmes such as T+1, proactive client outreach benefits our clients by sharing information on what we believe T+1 readiness and capability entails, and how we can help. It also gives us a ‘temperature check’ of where our clients are at in their preparations and ultimately readiness, which helps us to take stock and assess their needs.
We also offer tailored solutions and dedicated support teams to assist clients with the transition, ensuring a smooth adaptation to T+1.
As the go-live approaches, we will introduce scorecards and readiness assessments to gauge client preparedness and identify areas requiring additional support. We also offer tailored solutions and dedicated support teams to assist clients with the transition, ensuring a smooth adaptation to T+1.
Furthermore, we are strong advocates for collaboration in the trade associations, where we are leading a number of workstreams, and we encourage our clients to make good use of their memberships — a united voice always helps to achieve united outcomes.
Sancin: Custodians of institutional clients will be required to intensively and transversally support their clients during and after the T+1 transition. They will be required to explain, educate, and support discussions with institutional clients around its implications on settlement and custody activities. Eventually, even helping institutional clients in their dialogue with their direct brokers. The T+1 aspects we expect to be critical for institutional investors are related to:
a) the stress brought to the settlement timeline, which will imply for institutional investors to properly set up their resources to grant full coverage of the new market cut offs and timelines;
b) introducing some amendments to the way European settlement instructions are structured like the partial settlement indicator, when not served by their custodians automatically and SSIs;
c) understanding and managing timeline implications on voluntary corporate actions.
Custodians will have to adjust their support depending on the region where their institutional clients are domiciled. When custodians also act as delegated middle office partners, they will have to assess and share with their institutional clients the prospective of the middle office impacts as well.
Besides, European custodians and depositary banks will have to handle the eventual indirect impacts of the T+1 move, encouraging asset managers to reduce the settlement cycle of their registered funds, stretching and squeezing underlying processes (i.e. distribution, transfer agency, and fund NAV calculation).
Finally, European custodians and depositary banks of ETFs will have to engage in a transformational journey to evolve their services to cope with the liquidity challenges represented by moving a relevant part of the fund underlying assets to a T+1 settlement cycle.
Roche: In North America’s move to T+1, the unified electronic affirmation process via DTCC required a lot of data cleansing to prepare for the shift for all firms — buy side, sell side, and custodians.
Europe and the UK lack a unified affirmation model. Although there are task forces in place to assist with data cleansing best practices, from which they are distributing literature on how to do this, what is missing is a method to continuously maintain the client data during pre-trade maintenance activities as well as to leverage real-time resolution to settlement exceptions. Enter Saphyre.
Saphyre maintains buy side and sell side client account maintenance events, so that, for example, when an asset owner transitions accounts from one custodian to another using Saphyre, the platform maintains the respective effective and expiration dates for the old and new SSIs.
When those same accounts are used to onboarding with respective sell sides, Saphyre’s patented technology remembers every order management system, electronic trading system, and sell side counterparty that needs to receive those updated SSIs and when they are effective. This eliminates trade exception from the point of inception of the change to the account so that no messages, whether via FIX, SWIFT, APIs, or otherwise, are found with expired SSIs on their respective messages.
In addition, Saphyre can flag compliance and know your customer (KYC) issues with allocated accounts to block trade before they are sent to custodians and CSDs, because the platform is continuously monitoring the accounts beyond just onboarding.
Even better, should something fall through the cracks and/or non-client data related issues arise, Saphyre provides a proprietary, real-time and authenticate interface to be shared between trading parties that eliminates all callbacks related to SSIs, inventory management issues, and/or trade errors so that it can be resolved directly between the parties and communicate to their respective custodians for the trade, all in real time.
To what extent will successful T+1 implementation depend upon achieving higher rates of STP? Which traditionally manual processes are custodians prioritising for automation, and how are technology providers supporting this transformation through enhanced connectivity and workflow solutions?
Simon Waddington: The high-level roadmap issued by the EU T+1 Industry Committee in June made it very clear that automation and STP efficiency are going to be critical for a successful T+1 transition in Europe. Given the shortened settlement timeframe and number of participants and platforms involved for a typical securities finance transaction, this is even more critical in the financing industry. Key recommendations identified in the roadmap include automation of SSI processes, pre-matching, partial settlements, and returns/recalls.
Automated solutions from technology providers exist for almost all of these items today, including the EquiLend SSI Solutions, powered by SSImple’s market-leading SSI matching and enrichment technology.
Sancin: Looking at our day-to-day activities, we already have very high rates of STP processing. In the context of the US transition to T+1, we reviewed our end-to-end workflows to highlight any manual/semi-manual processes that could have led to inefficiencies and identify potential needs of manual intervention.
The same is currently ongoing with EU/UK and Switzerland with a strong focus on operational efficiencies to create automation wherever possible. To take your question a step further, I would also say that this review should be undertaken by all market actors, including FMIs.
The importance of having automated and efficient processes is key insofar as the priority for all impacted parties is to move simultaneously in the same direction, ensuring adherence to the T+1 Industry Committee recommendations and full understanding of the implications for different types of investors (e.g. asset managers, asset owners) and the different geographies. Finally, as far as technology providers are concerned, I am sure we will hear a lot from them in the coming months in parallel with the further to be dig-in subjects at international level (e.g. corporate action standards, cross-border implications, mutual funds and ETFs settlement timelines, foreign exchange trading).
Roche: The many typical manual processes for custodians to prioritise for automation which are available to them today from solutions like Saphyre, are:
Assembling trade allocations for custodians, especially amongst disparate SWIFT messages.
Exception management between buy and sell sides using a real-time, authenticated affirmation user interface, like Saphyre X, between buy and sell sides that eliminates callbacks is a competitive game changing.
Enriching SSIs and LEI – which all goes back to the onboarding and maintenance of client accounts for the middle and back office.
Auto-calculating, and sending for best execution, FX funding of security trades intraday and end of day.
Stirling: STP is critical to firms successfully adapting to T+1, furthermore where STP is not achievable then having clear ownership and action clarity will ensure timely remediation. AccessFintech provides this clarity eradicating the need for lengthy email conversations and enabling self-service at point of booking. In the event an exception remains open the platform facilitates structured data distribution and communication between parties.
Casteleyn: We consider STP and pre-trade to post-trade automation to be fundamental to operate successfully in a T+1 environment and to reduce risk which, after all, is the key premise of moving to T+1. We consider the various virtual ‘hand shakes’ at each step of the processing value chain and the potential points of failure that can occur.
To operate in a T+1 environment, to meet the processing deadlines defined by the industry, such as allocations and confirmations by 23:00 CET and settlement instructions by 23:59 CET, there needs to be timeliness and accuracy. Automation will help with the timeliness and it will also help to identify any inaccuracies and need for remediation.
Manual processes will simply be insufficient and increase operational risk, therefore we are fully supportive of the EU and UK industry recommendations which emphasise automation.
As a custodian, J.P. Morgan offers integrated workflow, exception management, and reporting solutions as a matter of course, in addition to cash management solutions such as FX. All these tools will assist our client once the settlement instruction is generated. In addition we also offer a suite of middle office solutions to our clients that can help in the confirmation of trades and the generation of confirmed settlement instructions.
Beyond regulatory compliance, what tangible benefits do custodians anticipate from T+1 implementation in terms of capital efficiency and risk reduction? How are industry participants collaborating to share implementation costs and ensure consistent market practices across the custody ecosystem?
Roche: The usual two choices custodians will consider is whether they are unifying their internal processes for all jurisdictions and all settlement cycles or creating several bespoke ones through the assignment of labour and checklists by jurisdiction to manage T+1, T+2, and even T+3, especially when concerning cross border settlements. The former will achieve savings for certain by consolidating bespoke processes and inherently reduce risk. The latter can do the same but will not bring about savings and custodians will struggle to compete with increased costs to manage timely settlement as the globe moves to T+1.
Instituting consistent market practices will never be 100 per cent, even by the market participants that support it, and custodians know this and will be manually addressing these occurrences. Sharing the implementation costs for such work will be met by grumbling by custodial clients and will increase pressure on maintaining competitive advantage against peers.
There is a third option, to optimally leverage market infrastructure in the cloud that can provide an electronic unified process for all jurisdictions and settlement cycles by remembering the nuances required for each custodian’s respective buy and sell side clients, digitally, through a platform like Saphyre. This option allows the custodian’s clients to self-serve the data as part of their activity in maintaining the custodian accounts and setting up trading lines with their counterparties as well as any associated electronic platforms (OMS/EMS systems). This ensures that the data is accurate for use in settlement, all in real time in an automated fashion, that can be relied upon by the custodians.
Dockx: Naturally, removing the day in between trade date and settlement date reduces credit and market risk between trading parties. That narrative is well-versed now alongside the current misalignment across the major markets and the pressure, if not risk, that places on the funds industry.
From a custodian’s point of view, T+1 does not fundamentally change our role, and the risks we navigate as these are very much centred around settlement day.
Granted, we must ensure that we ‘enable’ our clients and transmit their settlement and corporate action instructions in swift order, monitor and report exceptions — all of which we do today.
On settlement date our role is to ensure that our clients have position and cash adequacy — that does not change with T+1 and then of course beyond that our duties for safekeeping and asset servicing remain as is.
However, this process could come under pressure if upstream and downstream processes falter, and this is one of our concerns and why we, as an institution, lean in to the need for uniformity across the ecosystem whether that is investment managers, institutional investors, brokers, custodians, CSDs and CCPs. Any chinks in the collective armour invites risk.
At an industry level I see strong collaboration, and let us not forget both the UK and EU T+1 recommendations have been written by the industry for the industry — there should, therefore, be strong understanding and consensus. The foundations have been set. Both jurisdictions also identify the need for market standards, and once they have been finalised should be put into good effect.
Sancin: The reduction of the settlement cycle in the EU aims primarily at reducing the misalignment existing today between the settlement cycles of Europe versus other major markets, which brings costs and inefficiencies for all the actors along the settlement chain.
It can also further create the conditions for improving the competitiveness of European markets, attracting global investors through better efficiency and modernisation of post-trade processes. These are the first tangible benefits we see, together with the reduction of the counterparty risk and the subsequent improvement of liquidity management.
Regarding the second part of your question, I believe that the work of the different T+1 technical workstreams established to address specific challenges is a very good example of collaboration across the ecosystem. It has been so far a collective and cooperative endeavour with industry participants and public authorities sharing the same goals: removing legislative, regulatory, technical and operational hurdles to guarantee a smooth transition to T+1.
Stirling: Custodians will reduce the amount of balance sheet allocated to providing credit facilities to clients to cover settlement obligations. Using utilities like AccessFintech that have a comprehensive network of data providers creates capacity across the ecosystem as market participants address issues faster, allowing resources to address more complex issues. Client service standards are improved through reduced enquiries and clear settlement status irrespective of region or place of settlement.
Waddington: We have already seen a tangible increase in automation across the industry since the move to T+1 in the US and Canada in 2024, for example a 44 per cent increase in usage of our automated recalls platform, and we expect that trend to continue. Consistent market practices are critical for processes such as SSI matching, which was a recommendation in the high-level roadmap issued by the EU T+1 Industry Committee last month.
A recent industry report indicated that 21 per cent of settlement fails are caused by inaccurate SSIs, which highlights how important it will be to use platforms such as our preferred SSI partner, SSImple. Market participants who do not automate and leverage these platforms will inevitably experience significantly higher staffing costs and expose themselves to greater settlement risk.
Looking beyond 2027, how are custodians and technology providers positioning their infrastructure investments to accommodate potential future moves towards same-day settlement or real-time gross settlement? What lessons from the T+1 transition will inform future post-trade infrastructure evolution?
Casteleyn: While all eyes are now on the move to T+1, which takes a massive collective effort, there are indeed already some signs that this is a precursor to a T+0 settlement cycle.
We see that in markets such as India, in comments made by policy makers in the US, and also in the crypto and distributed ledger space, which often operates on a same-day, if not 24/7 basis, especially for payments.
The latter (24/7 trading and settlement) is actually a paradigm shift which goes further than T+0, as it requires a complete rethink of not only post-trade processes, but also how trading, price formation, and liquidity management are managed.
We already process T+0 in a number of markets for same day trades and financing, albeit on a relatively small scale. One aspect which is already appearing in the T+1 conversations but will become even more important in a same day settlement context is whether and how settlement will be processed: will it be optimised in multiple intraday batches which can optimise the need for liquidity and inventory, or will they be processed on a real time gross basis, which reduces intraday market risk but comes at a greater cost in terms of settlement, liquidity and inventory provision? From that perspective T+1 will be a good stepping stone towards same day settlement.
But first things first, let us focus on implementing T+1 in Europe, UK and Switzerland in October 2027.
Waddington: Lessons have already been learnt from the US transition to T+1 settlement, although that was generally a smooth process for most of the market. Europe remains a significantly greater challenge due to the number of different markets and depositories involved. The lessons learnt will likely be around how the market adapts to a compressed settlement timeframe across so many jurisdictions and CSDs. It has been suggested that up to 83 per cent of processing time will disappear in Europe, which will inevitably create challenges for legacy infrastructure unless there is a high level of automation and STP.
EquiLend has been preparing for the trend towards same-day settlement with our 1Source solution, which will eliminate many of today’s lifecycle event mismatches. As the growth of natively digital assets and tokenised traditional assets continues, distributed ledger technology is a natural next step towards significantly increased efficiency and T+0 settlement.
Stirling: Embracing AI through SynergyIQ themes facilitates further STP utilising root cause analysis and making the necessary changes. Providing technology to connect systems front-to-back and back-to-front allows for automated remediation as data flows seamlessly both internally and externally. Improving data sharing capabilities opens further opportunities to improve all aspects of the post-trade workflow including Inventory management, cash and collateral movements, asset servicing, etc.
Sancin: This is the question that is often asked in relation to T+1 — is it the intermediate step towards T+0 or atomic settlement? Guessing the exact timeline for the EU to move to T+0 or to atomic settlement is tricky. Still, I believe that all the efforts undertaken at all levels to achieve T+1 in Europe will be instrumental to go even further.
In terms of lessons learnt, one significant takeaway is that the work does not stop with T+1 going live: whether it is deploying additional automation or counterbalance the possible increase in fails, BNP Paribas keeps a heightened focus on this industry evolution and stands ready to accompany clients well beyond October 2027.
In the European Union, shortening the settlement cycle is part of a broader picture insofar as the European Commission considers T+1 as a catalyst for some of the bigger challenges detailed in the Savings and Investment Union (SIU) initiative.
The SIU should bring more consolidated and harmonised financial markets across the Union. While T+1 is about speed, asset servicing is about substance. We believe that the future of post-trade in Europe will be won by creating and seizing the right opportunities to harmonise, simplify and improve asset servicing overall.
Roche: Serving the middle and back office for buy sides, sell sides, and not just custodians, via a common, interoperable SaaS-based platform is how we get to real-time gross settlement. Saphyre does this by managing client account data, which is a critical component for equipping custodians with the real-time gross settlement data for every respective trade. Working alone between custodians and CSD will not be enough.
By serving those middle and back offices, especially from the start with their onboardings, for the clients of custodians, our platform normalises the data for the way it needs to be ingested by custodians and their CSDs respectively, in a complete STP manner as we have been doing for the last eight years.
Updates to standing instructions, routing instructions, SWIFT messages will all be seamless and automatic, accounting for the nuances of each client, jurisdiction, and asset class by settlement clock (T+1, T+2, T+3).
When we are there, the lesson for the future post-trade infrastructure of the industry, and the one that Saphyre has already built the skeletal structure for, is that custodians and CSDs will have a single process for settlement that can swivel to and automatically account for the client, jurisdiction, and settlement cycle per asset class permutation, when needed, all in real time, which will also include the participation of the underlying buy and sell sides.
Craig Stirling
Synergy Securities Product Owner, AccessFintech
Silvia Sancin
Senior Custody Solutions Manager, BNP Paribas
Simon Waddington
Head of Post-Trade & RegTech Solutions, EquiLend
Tom Casteleyn
EMEA Head of Custody, J.P. Morgan
Alex Dock
Head of Custody Industry Development, J.P. Morgan
Gabino Roche Jr.
CEO and Founder, Saphyre
With the October 2027 deadline rapidly approaching, what are the most critical technology infrastructure upgrades custodians must prioritise to ensure seamless T+1 implementation? How are you balancing the need for system modernisation against the operational continuity requirements during this transition period?
Silvia Sancin: To address the level of complexity of this change, we believe that custodians must consider the entire trade lifecycle — from account creation to settlement of a trade — and foster collaboration across all their divisions. Custody, risk, compliance, funding, middle office services, transfer agent, fund accounting — every product and service is embedded into our governance.
With clients at the heart of our business, we have dedicated streams to review bespoke impacts and continuously engage with our clients to socialise any change they may experience. We have identified two key areas where we are strategically concentrating our priorities for the benefit of our clients:
Operational efficiencies: We are actively working with clients to eliminate friction points and legacy processes, and implement automation wherever feasible.
Non-standard events: We are focusing on scenarios that test the resiliency of our platforms, including public holidays, double settlement days, outages, and other exceptional events that may impact our systems. By addressing these areas, we aim to demonstrate the robustness and reliability of our platforms, even in unusual or challenging circumstances.
The transition to T+1 settlement in Europe offers a valuable chance for us to validate the effectiveness of our follow-the-sun model, which is designed to provide uninterrupted support to our clients across different time zones. As the settlement cycle is shortened, we recognise the importance of delivering critical support during peak European market hours, ensuring that our clients’ operational needs are met and that they can navigate the transition process with confidence.
Tom Casteleyn: As a global custodian, we operate in over 100 markets, many of which have moved to T+1, most notably the US in 2024, but also India, Mexico, and Argentina, or are considering doing so, like Japan and, most recently, Hong Kong. That allows us to leverage the expertise and system upgrades from these prior market moves to accommodate the EU, Swiss and UK transitions to T+1 rather than starting from scratch.
This being said, the sheer scale and complexity of the European markets, the breadth and diversity of the financial market infrastructure (FMI) landscape, most notably the central securities depositories (CSDs) alongside TARGET2-Securities (T2S), require a unique focus. It is also important to remember that international central securities depositories (ICSDs) are part of the EU transition meaning Europe’s move to T+1 is truly global in terms of impacts.
This is why, over the last two years, we have been actively engaged in industry committees and workstreams to ensure the recommendations in February’s UK Accelerated Settlement Taskforce (AST) T+1 Implementation Plan, and more recently the EU T+1 Industry Committee High-Level Roadmap, reflect the views and specific requirements of industry representatives such as custodians, asset managers, and buy and sell side clients.
In terms of infrastructure upgrades, the most critical developments are geared towards ensuring our systems can withstand the velocity of settlement instructions being transmitted through our systems in a shortened timeframe (experience from the US indicates that we are already are able to this); working with clients to ensure that upstream confirmation and allocation systems can process trades throughout trade date; ensuring settlement instructions are sent using straight-through processing (STP) to the right CSD; and enhancing data management capabilities, such as standard settlement instructions (SSI) management, to meet the instruction cut-offs for T+1 settlement.
In addition, there are a number of other developments to enhance the processing of asset servicing events, the timely recall of stock loans, enhanced FX solutions, funding, etc.
Needless to say, we are ensuring that all these enhancements are adequately managed and tested, and we have a dedicated and firm-wide programme structure in place across J.P. Morgan to that end.
Craig Stirling: Technology platforms need to be real-time, market and asset class agnostic, and interoperable with other data providers and relevant vendors.
From a pre-matching perspective, trade exception queues across multiple jurisdictions need to be minimised through improved STP, reducing redundant exception creation and automated remedial actions, both strategic and tactical. By using a financial data hub like AccessFintech, clients can view a consolidated consistent view of the world across providers, while retaining best-in-class system resiliency and redundancy.
Gabino Roche: Most large custodians still rely on decades-old, acquisition-patched core systems. They have learnt to ingest client data in their proprietary formats, but that ‘custodian-specific standardisation’ breaks down under T+1 because it does nothing for real-time, bidirectional interaction with buy and sell side clients.
To achieve true real-time collaboration you need interoperability, and interoperability starts with an intelligent data-normalisation layer that serves both the custodian’s internal systems and every external counterparty.
The fastest, lowest-risk route is to provide that layer as neutral cloud infrastructure delivered via Software as a Service (SaaS) — rails that are independent of any one firm.
That is precisely what Saphyre offers:
We capture and ‘remember’ reference data — legal entity identifiers (LEIs), place of settlements (PSETs), SSIs, fund and sleeve-level mappings — from multiple standards and counterparties.
We expose that data through a self-service, permissioned model so each party sees only what it is entitled to see, yet everyone operates off the same golden copy.
By normalising and validating data up-front, we eliminate manual exceptions, accelerate trade affirmation on trade date, and let legacy custodian cores meet T+1 cut-offs without a ‘big-bang’ rewrite.
In short, custodians do not need to rip out their mainframes; they need a smart, cloud-native overlay that speaks every standard for them and their buy and sell side clients, in real time. Saphyre is that overlay.
Given the coordinated UK-EU T+1 timeline, how will custodians manage the operational complexities of cross-border settlement, particularly regarding time zone differences and the compressed settlement window? What specific challenges arise when handling transactions across different regulatory jurisdictions under accelerated settlement?
Stirling: Availing of systems and infrastructure that are CSD-agnostic becomes a critical need to ensure ready access to data and the relevant insights.
We do this through AccessFintech’s SynergyIQ, which provides insights on both parties’ instructions irrespective of where they are alleging. This aids both cross-border transactions, as well as showing where there are PSET differences. Making these insights visible real-time simplifies the remediation of these exceptions as the action is clearly defined without manual investigation.
Roche: Custodians have traditionally organised operations by jurisdiction — each desk ticking off a local checklist of reporting, matching and settlement deadlines.
Under a coordinated UK-EU move to T+1, those siloed workflows collide with three new realities:
Time-zone compression: A UK-executed trade booked at 17:30 BST must be enriched, affirmed, and released to an EU CSD often before 18:00–19:00 CET on the same calendar day. That leaves minutes, not hours, for exception handling.
Fragmented rule books: While the UK and EU aim for a common settlement date, they retain different CSDR penalty regimes, cut-off times and hold/release controls. Custodians must validate each instruction against the right rule set and still maintain a single golden record for clients.
Cross-border data choreography: Securities may move from CREST to Euroclear Bank or Clearstream; cash may settle via TARGET2 or CHAPS. Each leg uses a different message flavour (ISO 20022 MX versus legacy MT), different settlement statuses and different reporting obligations.
Sancin: We know that the complexity of the European market structure presents challenges for harmonisation, particularly when it comes to cross-border transactions. In this context, we believe that an efficient completion of all pre-settlement processes is key. Automated exchange of allocation, confirmation and same-day trade matching are vital to enable the efficiency needed with the compressed timeline. Furthermore, cross-border settlement and its specific challenges can be overcome thanks to efficient SSIs management and the foreseen usage of automatic messaging protocols used by all counterparties that maintain their golden source data in the same database to eliminate frictions and reduce the need for manual intervention as well as the risk of delay and errors in the settlement chain.
Alex Dockx: Given the complexity of EU post-trade market infrastructures, with many exchanges, CCPs, CSDs, the ICSDs, plus T2S, cross-border (or rather cross-CSD) settlements are by necessity more complex than in a single integrated market like the US or the UK. This is also why there was a lot of focus in the industry task forces on measures to streamline these cross-platform movements.
Within J.P. Morgan, we are making substantial developments to enrich settlement instructions with identifiers such as the place of settlement and safekeeping.
In all of this, we keep a close eye on our international investor base, especially our clients who are operating out of Asian time zones, as they will no longer benefit from an extra day ahead of settlement to repair any errors. Reporting will be key so that they can manage and remediate ideally before the start of the European day.
When it comes to regulation, there is not a global settlement standard, so each migration to T+1 needs to align with the specific regulatory and market requirements for that particular jurisdiction. For EU and UK T+1 that is Central Securities Depositories Regulation (CSDR), and the requirements apply to any party transacting in the region’s markets regardless of their domicile. In theory, there should not be any cause for divergence between how different EU member states and CSDs implement T+1, but close attention to how this happens in practice is required.
The compressed settlement cycle inevitably increases operational pressure and reduces time for manual intervention. How are custodians redesigning their exception management processes and fail management procedures? What contingency measures are being implemented to handle settlement failures in a T+1 environment?
Casteleyn: There are a number of other developments required from brokers, investors, custodians and other intermediaries, to streamline the execution to settlement flow and to avoid impact on the matching process, as there will be limited time for exception management ahead of settlement date.
The key is to do what is done on T+1 today, which will now become the intended settlement date, on trade date itself, and that includes real-time confirmations and allocations so settlements can be generated and matched ahead of settlement date, proactive inventory management, reviewing funding arrangements, etc.
We do not want to see more fails in a region which has worked so hard, post-CSDR, to improve operational processes. However, we need to be prepared, and proactive fails management will be essential.
We are also further enhancing our exception management handling functionality, including reviewing existing automated exception handling tools to ensure they are able to scale and quickly identify and resolve issues as close to real time as possible. This will include creating automated alerts and escalation protocols, to address settlement matching exceptions and failures promptly.
It will be important for the entire industry to reduce any reliance on manual intervention, and we will be leveraging our data analysis and fail prediction tools to identify where STP breaks down, to make targeted improvements internally, where required, with our clients and our sub-custody and CSD partners.
Roche: As per the three realities I cited in the previous question, market infrastructure like Saphyre tackle these challenges in the following ways:
Challenge 1: Synchronising cut-offs across time zones — most custodians hire follow-the-sun teams and add hand-offs which are costly and error-prone. Market infrastructure addresses this by pre-populating client data for trades in real time. Our platform ‘remembers’ LEIs, SSIs, PSETs and fund mappings, so instructions can be auto-enriched as part of the trade or post-trade processing with no manual enrichment at 17:30 BST.
Challenge 2: Reconciling divergent rule sets — most custodians hard-code multiple rule engines inside legacy systems, which require nightly quality assurance test cycles.
Market infrastructure externalises rules and even maintains the reference data by the custodian’s respective clients. Saphyre tags each counterparty, market and asset class with its regulatory attributes, letting custodians validate and route instructions dynamically without rewriting their code (or even COBOL).
Challenge 3: Managing cross-CSD messaging — traditionally custodians would run parallel MT and MX interfaces and maintain bespoke translation tables.
Again, a SaaS-based solution provides a one-normalised data fabric. Ingesting and outputting MT, MX, FIX, or API calls interchangeably, so a single ‘golden copy’ feeds both the UK and EU legs while keeping message syntax compliant.
Challenge 4: How to perform exception handling in minutes, not hours — custodians throw more staff at post-trade queues
With an intelligent, SaaS-based platform, proactively flagging, exceptions are surfaced directly to the custodian’s buy and sell side clients while providing them an authenticate, secure real-time interface to resolve the issues without callbacks. Static data exceptions are eliminated because the data is maintained directly with the clients, again in real time.
Sancin: Indeed, the operational pressure will increase with T+1, and this was true also when the US market moved to T+1 back in May 2024. At BNP Paribas, our integrated banking model is a great strength. With products and services ranging from execution to clearing all the way to custody, we are able to quickly mobilise all businesses and validate the full end-to-end flows both operationally and functionally. This is a critical success factor to reduce the manual processes and therefore the need for human intervention.
Having said that, our exception management is already today a very robust process which provides real-time information about trade statuses to our clients, both via SWIFT messages and via our web portal. However, we think a faster turnaround on exceptions will be paramount, allowing for prioritisation of outstanding items to meet the new timelines. This is an aspect all custodians will have to prioritise in their to-do list.
Stirling: By producing exception queues limited to actionable items through tools like SynergyIQ, custodians are already benefiting from focused, prioritised workload management.
This reduces operational effort in the pre-matching space by approximately 90 per cent as ‘no value add’ unmatched transactions are made redundant. Organisations may look to introduce contingency measures such as temporary headcount increases, but a robust, data focused, strategic solution is typically the end goal.
What steps are custodians taking to ensure their institutional clients — particularly asset managers and pension funds — are adequately prepared for T+1? How are you addressing varying levels of client readiness, and what support mechanisms are being put in place for clients requiring additional assistance?
Stirling: AccessFintech has created a STP workflow to facilitate partialling at scale in markets where the CSD or local agent do not facilitate auto-partials. Utilising this functionality can significantly reduce clients’ unencumbered assets and improve their balance sheet and P&L. This is one of the key areas in which we are seeing custodians support their institutional clients.
Alex Dockx: The US move to T+1 has shown that close collaboration with FMIs, industry partners, and investors is key to success. This is why, as a trusted partner, we have already introduced a comprehensive client outreach programme to assist and guide our clients in their preparations.
To date, we have already hosted webinars, and intend to leverage the formula we used for the US migrations which included podcasts, webinars, FAQs, articles, and roundtables.
As we always find in large change programmes such as T+1, proactive client outreach benefits our clients by sharing information on what we believe T+1 readiness and capability entails, and how we can help. It also gives us a ‘temperature check’ of where our clients are at in their preparations and ultimately readiness, which helps us to take stock and assess their needs.
We also offer tailored solutions and dedicated support teams to assist clients with the transition, ensuring a smooth adaptation to T+1.
As the go-live approaches, we will introduce scorecards and readiness assessments to gauge client preparedness and identify areas requiring additional support. We also offer tailored solutions and dedicated support teams to assist clients with the transition, ensuring a smooth adaptation to T+1.
Furthermore, we are strong advocates for collaboration in the trade associations, where we are leading a number of workstreams, and we encourage our clients to make good use of their memberships — a united voice always helps to achieve united outcomes.
Sancin: Custodians of institutional clients will be required to intensively and transversally support their clients during and after the T+1 transition. They will be required to explain, educate, and support discussions with institutional clients around its implications on settlement and custody activities. Eventually, even helping institutional clients in their dialogue with their direct brokers. The T+1 aspects we expect to be critical for institutional investors are related to:
a) the stress brought to the settlement timeline, which will imply for institutional investors to properly set up their resources to grant full coverage of the new market cut offs and timelines;
b) introducing some amendments to the way European settlement instructions are structured like the partial settlement indicator, when not served by their custodians automatically and SSIs;
c) understanding and managing timeline implications on voluntary corporate actions.
Custodians will have to adjust their support depending on the region where their institutional clients are domiciled. When custodians also act as delegated middle office partners, they will have to assess and share with their institutional clients the prospective of the middle office impacts as well.
Besides, European custodians and depositary banks will have to handle the eventual indirect impacts of the T+1 move, encouraging asset managers to reduce the settlement cycle of their registered funds, stretching and squeezing underlying processes (i.e. distribution, transfer agency, and fund NAV calculation).
Finally, European custodians and depositary banks of ETFs will have to engage in a transformational journey to evolve their services to cope with the liquidity challenges represented by moving a relevant part of the fund underlying assets to a T+1 settlement cycle.
Roche: In North America’s move to T+1, the unified electronic affirmation process via DTCC required a lot of data cleansing to prepare for the shift for all firms — buy side, sell side, and custodians.
Europe and the UK lack a unified affirmation model. Although there are task forces in place to assist with data cleansing best practices, from which they are distributing literature on how to do this, what is missing is a method to continuously maintain the client data during pre-trade maintenance activities as well as to leverage real-time resolution to settlement exceptions. Enter Saphyre.
Saphyre maintains buy side and sell side client account maintenance events, so that, for example, when an asset owner transitions accounts from one custodian to another using Saphyre, the platform maintains the respective effective and expiration dates for the old and new SSIs.
When those same accounts are used to onboarding with respective sell sides, Saphyre’s patented technology remembers every order management system, electronic trading system, and sell side counterparty that needs to receive those updated SSIs and when they are effective. This eliminates trade exception from the point of inception of the change to the account so that no messages, whether via FIX, SWIFT, APIs, or otherwise, are found with expired SSIs on their respective messages.
In addition, Saphyre can flag compliance and know your customer (KYC) issues with allocated accounts to block trade before they are sent to custodians and CSDs, because the platform is continuously monitoring the accounts beyond just onboarding.
Even better, should something fall through the cracks and/or non-client data related issues arise, Saphyre provides a proprietary, real-time and authenticate interface to be shared between trading parties that eliminates all callbacks related to SSIs, inventory management issues, and/or trade errors so that it can be resolved directly between the parties and communicate to their respective custodians for the trade, all in real time.
To what extent will successful T+1 implementation depend upon achieving higher rates of STP? Which traditionally manual processes are custodians prioritising for automation, and how are technology providers supporting this transformation through enhanced connectivity and workflow solutions?
Simon Waddington: The high-level roadmap issued by the EU T+1 Industry Committee in June made it very clear that automation and STP efficiency are going to be critical for a successful T+1 transition in Europe. Given the shortened settlement timeframe and number of participants and platforms involved for a typical securities finance transaction, this is even more critical in the financing industry. Key recommendations identified in the roadmap include automation of SSI processes, pre-matching, partial settlements, and returns/recalls.
Automated solutions from technology providers exist for almost all of these items today, including the EquiLend SSI Solutions, powered by SSImple’s market-leading SSI matching and enrichment technology.
Sancin: Looking at our day-to-day activities, we already have very high rates of STP processing. In the context of the US transition to T+1, we reviewed our end-to-end workflows to highlight any manual/semi-manual processes that could have led to inefficiencies and identify potential needs of manual intervention.
The same is currently ongoing with EU/UK and Switzerland with a strong focus on operational efficiencies to create automation wherever possible. To take your question a step further, I would also say that this review should be undertaken by all market actors, including FMIs.
The importance of having automated and efficient processes is key insofar as the priority for all impacted parties is to move simultaneously in the same direction, ensuring adherence to the T+1 Industry Committee recommendations and full understanding of the implications for different types of investors (e.g. asset managers, asset owners) and the different geographies. Finally, as far as technology providers are concerned, I am sure we will hear a lot from them in the coming months in parallel with the further to be dig-in subjects at international level (e.g. corporate action standards, cross-border implications, mutual funds and ETFs settlement timelines, foreign exchange trading).
Roche: The many typical manual processes for custodians to prioritise for automation which are available to them today from solutions like Saphyre, are:
Assembling trade allocations for custodians, especially amongst disparate SWIFT messages.
Exception management between buy and sell sides using a real-time, authenticated affirmation user interface, like Saphyre X, between buy and sell sides that eliminates callbacks is a competitive game changing.
Enriching SSIs and LEI – which all goes back to the onboarding and maintenance of client accounts for the middle and back office.
Auto-calculating, and sending for best execution, FX funding of security trades intraday and end of day.
Stirling: STP is critical to firms successfully adapting to T+1, furthermore where STP is not achievable then having clear ownership and action clarity will ensure timely remediation. AccessFintech provides this clarity eradicating the need for lengthy email conversations and enabling self-service at point of booking. In the event an exception remains open the platform facilitates structured data distribution and communication between parties.
Casteleyn: We consider STP and pre-trade to post-trade automation to be fundamental to operate successfully in a T+1 environment and to reduce risk which, after all, is the key premise of moving to T+1. We consider the various virtual ‘hand shakes’ at each step of the processing value chain and the potential points of failure that can occur.
To operate in a T+1 environment, to meet the processing deadlines defined by the industry, such as allocations and confirmations by 23:00 CET and settlement instructions by 23:59 CET, there needs to be timeliness and accuracy. Automation will help with the timeliness and it will also help to identify any inaccuracies and need for remediation.
Manual processes will simply be insufficient and increase operational risk, therefore we are fully supportive of the EU and UK industry recommendations which emphasise automation.
As a custodian, J.P. Morgan offers integrated workflow, exception management, and reporting solutions as a matter of course, in addition to cash management solutions such as FX. All these tools will assist our client once the settlement instruction is generated. In addition we also offer a suite of middle office solutions to our clients that can help in the confirmation of trades and the generation of confirmed settlement instructions.
Beyond regulatory compliance, what tangible benefits do custodians anticipate from T+1 implementation in terms of capital efficiency and risk reduction? How are industry participants collaborating to share implementation costs and ensure consistent market practices across the custody ecosystem?
Roche: The usual two choices custodians will consider is whether they are unifying their internal processes for all jurisdictions and all settlement cycles or creating several bespoke ones through the assignment of labour and checklists by jurisdiction to manage T+1, T+2, and even T+3, especially when concerning cross border settlements. The former will achieve savings for certain by consolidating bespoke processes and inherently reduce risk. The latter can do the same but will not bring about savings and custodians will struggle to compete with increased costs to manage timely settlement as the globe moves to T+1.
Instituting consistent market practices will never be 100 per cent, even by the market participants that support it, and custodians know this and will be manually addressing these occurrences. Sharing the implementation costs for such work will be met by grumbling by custodial clients and will increase pressure on maintaining competitive advantage against peers.
There is a third option, to optimally leverage market infrastructure in the cloud that can provide an electronic unified process for all jurisdictions and settlement cycles by remembering the nuances required for each custodian’s respective buy and sell side clients, digitally, through a platform like Saphyre. This option allows the custodian’s clients to self-serve the data as part of their activity in maintaining the custodian accounts and setting up trading lines with their counterparties as well as any associated electronic platforms (OMS/EMS systems). This ensures that the data is accurate for use in settlement, all in real time in an automated fashion, that can be relied upon by the custodians.
Dockx: Naturally, removing the day in between trade date and settlement date reduces credit and market risk between trading parties. That narrative is well-versed now alongside the current misalignment across the major markets and the pressure, if not risk, that places on the funds industry.
From a custodian’s point of view, T+1 does not fundamentally change our role, and the risks we navigate as these are very much centred around settlement day.
Granted, we must ensure that we ‘enable’ our clients and transmit their settlement and corporate action instructions in swift order, monitor and report exceptions — all of which we do today.
On settlement date our role is to ensure that our clients have position and cash adequacy — that does not change with T+1 and then of course beyond that our duties for safekeeping and asset servicing remain as is.
However, this process could come under pressure if upstream and downstream processes falter, and this is one of our concerns and why we, as an institution, lean in to the need for uniformity across the ecosystem whether that is investment managers, institutional investors, brokers, custodians, CSDs and CCPs. Any chinks in the collective armour invites risk.
At an industry level I see strong collaboration, and let us not forget both the UK and EU T+1 recommendations have been written by the industry for the industry — there should, therefore, be strong understanding and consensus. The foundations have been set. Both jurisdictions also identify the need for market standards, and once they have been finalised should be put into good effect.
Sancin: The reduction of the settlement cycle in the EU aims primarily at reducing the misalignment existing today between the settlement cycles of Europe versus other major markets, which brings costs and inefficiencies for all the actors along the settlement chain.
It can also further create the conditions for improving the competitiveness of European markets, attracting global investors through better efficiency and modernisation of post-trade processes. These are the first tangible benefits we see, together with the reduction of the counterparty risk and the subsequent improvement of liquidity management.
Regarding the second part of your question, I believe that the work of the different T+1 technical workstreams established to address specific challenges is a very good example of collaboration across the ecosystem. It has been so far a collective and cooperative endeavour with industry participants and public authorities sharing the same goals: removing legislative, regulatory, technical and operational hurdles to guarantee a smooth transition to T+1.
Stirling: Custodians will reduce the amount of balance sheet allocated to providing credit facilities to clients to cover settlement obligations. Using utilities like AccessFintech that have a comprehensive network of data providers creates capacity across the ecosystem as market participants address issues faster, allowing resources to address more complex issues. Client service standards are improved through reduced enquiries and clear settlement status irrespective of region or place of settlement.
Waddington: We have already seen a tangible increase in automation across the industry since the move to T+1 in the US and Canada in 2024, for example a 44 per cent increase in usage of our automated recalls platform, and we expect that trend to continue. Consistent market practices are critical for processes such as SSI matching, which was a recommendation in the high-level roadmap issued by the EU T+1 Industry Committee last month.
A recent industry report indicated that 21 per cent of settlement fails are caused by inaccurate SSIs, which highlights how important it will be to use platforms such as our preferred SSI partner, SSImple. Market participants who do not automate and leverage these platforms will inevitably experience significantly higher staffing costs and expose themselves to greater settlement risk.
Looking beyond 2027, how are custodians and technology providers positioning their infrastructure investments to accommodate potential future moves towards same-day settlement or real-time gross settlement? What lessons from the T+1 transition will inform future post-trade infrastructure evolution?
Casteleyn: While all eyes are now on the move to T+1, which takes a massive collective effort, there are indeed already some signs that this is a precursor to a T+0 settlement cycle.
We see that in markets such as India, in comments made by policy makers in the US, and also in the crypto and distributed ledger space, which often operates on a same-day, if not 24/7 basis, especially for payments.
The latter (24/7 trading and settlement) is actually a paradigm shift which goes further than T+0, as it requires a complete rethink of not only post-trade processes, but also how trading, price formation, and liquidity management are managed.
We already process T+0 in a number of markets for same day trades and financing, albeit on a relatively small scale. One aspect which is already appearing in the T+1 conversations but will become even more important in a same day settlement context is whether and how settlement will be processed: will it be optimised in multiple intraday batches which can optimise the need for liquidity and inventory, or will they be processed on a real time gross basis, which reduces intraday market risk but comes at a greater cost in terms of settlement, liquidity and inventory provision? From that perspective T+1 will be a good stepping stone towards same day settlement.
But first things first, let us focus on implementing T+1 in Europe, UK and Switzerland in October 2027.
Waddington: Lessons have already been learnt from the US transition to T+1 settlement, although that was generally a smooth process for most of the market. Europe remains a significantly greater challenge due to the number of different markets and depositories involved. The lessons learnt will likely be around how the market adapts to a compressed settlement timeframe across so many jurisdictions and CSDs. It has been suggested that up to 83 per cent of processing time will disappear in Europe, which will inevitably create challenges for legacy infrastructure unless there is a high level of automation and STP.
EquiLend has been preparing for the trend towards same-day settlement with our 1Source solution, which will eliminate many of today’s lifecycle event mismatches. As the growth of natively digital assets and tokenised traditional assets continues, distributed ledger technology is a natural next step towards significantly increased efficiency and T+0 settlement.
Stirling: Embracing AI through SynergyIQ themes facilitates further STP utilising root cause analysis and making the necessary changes. Providing technology to connect systems front-to-back and back-to-front allows for automated remediation as data flows seamlessly both internally and externally. Improving data sharing capabilities opens further opportunities to improve all aspects of the post-trade workflow including Inventory management, cash and collateral movements, asset servicing, etc.
Sancin: This is the question that is often asked in relation to T+1 — is it the intermediate step towards T+0 or atomic settlement? Guessing the exact timeline for the EU to move to T+0 or to atomic settlement is tricky. Still, I believe that all the efforts undertaken at all levels to achieve T+1 in Europe will be instrumental to go even further.
In terms of lessons learnt, one significant takeaway is that the work does not stop with T+1 going live: whether it is deploying additional automation or counterbalance the possible increase in fails, BNP Paribas keeps a heightened focus on this industry evolution and stands ready to accompany clients well beyond October 2027.
In the European Union, shortening the settlement cycle is part of a broader picture insofar as the European Commission considers T+1 as a catalyst for some of the bigger challenges detailed in the Savings and Investment Union (SIU) initiative.
The SIU should bring more consolidated and harmonised financial markets across the Union. While T+1 is about speed, asset servicing is about substance. We believe that the future of post-trade in Europe will be won by creating and seizing the right opportunities to harmonise, simplify and improve asset servicing overall.
Roche: Serving the middle and back office for buy sides, sell sides, and not just custodians, via a common, interoperable SaaS-based platform is how we get to real-time gross settlement. Saphyre does this by managing client account data, which is a critical component for equipping custodians with the real-time gross settlement data for every respective trade. Working alone between custodians and CSD will not be enough.
By serving those middle and back offices, especially from the start with their onboardings, for the clients of custodians, our platform normalises the data for the way it needs to be ingested by custodians and their CSDs respectively, in a complete STP manner as we have been doing for the last eight years.
Updates to standing instructions, routing instructions, SWIFT messages will all be seamless and automatic, accounting for the nuances of each client, jurisdiction, and asset class by settlement clock (T+1, T+2, T+3).
When we are there, the lesson for the future post-trade infrastructure of the industry, and the one that Saphyre has already built the skeletal structure for, is that custodians and CSDs will have a single process for settlement that can swivel to and automatically account for the client, jurisdiction, and settlement cycle per asset class permutation, when needed, all in real time, which will also include the participation of the underlying buy and sell sides.
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