T+1: One year out
14 Oct 2026
Madison Hendrickson explores where the industry stands as the time left before the T+1 settlement deadline for the UK, Europe, and Switzerland ticks below one year
Image: yingyaipumi/stock.adobe.com
Since February 2025, time has been steadily ticking down to the deadline of transitioning to T+1 settlement in the UK and Europe. Alerts, reminders, guidelines, updates, and consistent messaging has been strewn across the industry, ensuring all are prepared for the shift commencing on 11 October 2027.
Now, with less than one year to go, market sentiment is that while there is still much work left to be done, most are on pace.
Progress as it stands today
Tokenovate reported in September that of post-trade professionals surveyed, 83 per cent said their firms are prepared for the October 2027 deadline, but only 32 per cent described operations as fully prepared.
On the surface, this discrepancy seems alarming as there is a big difference between feeling prepared and actually being prepared. Andrew Douglas, chair of the UK T+1 Accelerated Settlement Taskforce (AST), was able to give some further context, explaining that despite the gap he believes the market is in a good place.
“At the moment, I am comfortable that the industry is working at pace,” says Douglas. “In our most recent engagement survey, it showed that 83 per cent of the market were engaged in the project. In the US at the same point, it was about 50 per cent, so we do have a significantly higher level of engagement.”
Douglas explains that digging into the data showed asset managers averaged 57 per cent engagement, but explains, part of the reason he believes it is lower is due to asset managers frequently outsourcing services, whether it is the custodian or an independent third party. This outsourcing could be the cause of lower engagement as asset managers might assume someone else in their network is more responsible for the transition. Assumptions can be a dangerous thing, however, and firms are being urged that communication and cooperation is key.
“Ultimatley, Europe will only be ready if the whole ecosystem — from counterparties and custodians to CCPs, CSDs, and vendors — can operate within the same compressed timetable,” says Francisco Bejar Nuñez, head of custody at SIX, emphasising cooperation between all parties is the key to success.
Daniel Carpenter, CEO of Meritsoft, highlights that T+1 brings a “fresh urgency” to settlement inefficiencies that have existed for a long time.
“Firms need to look at their processes end to end and ask: why trades are failing, where are the breaks, what are the costs, and what has to change? No firm can solve this alone,” he says. “Settlement involves counterparties, custodians, and other providers, so communication and working together are essential.”
Carpenter offers some additional insight, stating: “Meritsoft has had many conversations with banks, brokers, and custodians over the past 12–18 months and while everyone is acutely aware of the implementation deadline, T+1 is one of several technology projects competing for attention and budget.”
“That is changing and today firms are significantly further forward in their own preparations,” he notes.
Douglas too remains hopeful. “I am very optimistic that the market will be ready in October.”
Implications of accelerated settlement
The fact that the world is turning to digitisation and automation cannot be avoided. The move to T+1 also suggests a subsequent move to T+0, or instant settlement.
“T+0 and atomic settlement are longer-term ambitions, and I think the focus should be on getting T+1 right first,” says Carpenter.
“There is still too much legacy infrastructure and there are too many different systems to move straight to instant settlement, but the current focus on achieving the settlement efficiency gains required for T+1 take the industry further down that road,” he notes.
Much of the industry agrees; building infrastructure and processes with T+0 in mind, but focus on proper execution of T+1.
Gus Sekhon, vice president of strategy at FINBOURNE Technology, suggests: “T+0 should influence the architecture firms build today, but the industry should not assume that instant settlement is automatically the optimal destination for every market or asset class.”
He explains that having modern and flexible data systems while automating more tasks gives companies the ability to adjust. “This way, they can be ready for whatever happens next.”
Bejar Nuñez reiterates this, stating, “Longer term, the question should be where instant settlement provides a genuine economic benefit rather than whether every transaction needs to settle instantly.”
Douglas agrees that a T+0 settlement timeframe is in the future, stating, “it will be here quicker than we perhaps think.”
He clarified that there is work to do in terms of agreeing what instant settlement means and highlights that, “when it gets to a tokenised world, we need the ability to match the asset to the payment rail.”
There is also caution surrounding leaving no time for netting; handling trades individually is proving increasingly obsolete, especially with such a shortened window.
Automation is the answer
With under 12 months left to get prepared for the transition, many firms are working out how best to approach it. Automation of processes seems to be the key. Manual processing is no longer viable, as according to the Association for Financial Markets in Europe (AFME) operational hours under T+1 drop from around 12 hours to 2.
“Now, the main focus should be on finding out where companies still depend on manual work, scattered information, and any batch based processes,” says Sekhon.
Douglas wholeheartedly agrees. “Our message from day one has been very clear: automate, because you’re going to have to do it eventually.” He highlights that the estimate of global capital markets on T+1 is between 60 and 70 per cent, and with the move of the UK and Europe the percentage will rise to 80 to 90 per cent. “The writing is on the wall,” Douglas emphasises, “If you are relying on manual processes, you are going to be in trouble at some point.”
Cian Fernando, CEO at Aqua Global, reiterates this explaining that many banks still run on legacy infrastructure that simply cannot settle trades fast enough.
“If they do not modernise soon, they will face failed settlements, cash penalties, funding pressure, and operational strain,” notes Fernando.
There is no one answer to how firms should automate their processes and address other changes needed for the T+1 deadline, as nuance exists for each individual firm’s focus.
Recently the AST published an Implementation Toolkit which includes a readiness scorecard, checklist, practical control expectations, and guidance for firms on procedures that could be useful to introduce or update.
The recommendations are not prescriptive, and Douglas emphasises there is no single way to address the settlement transition.
He does, however, advise firms to avoid throwing people at the problem. “We saw in the US that this does not end well, and the reality is that you will still have to do the automation anyway.”
Carpenter highlights this, stating that while the US’s transition to T+1 was broadly successful, there are still people manually processing trades to prevent fails.
He observes that, “US operational costs have not returned to pre-T+1 levels, and some firms have simply absorbed the extra staff costs.”
What can be learnt
The US’s recent transition to T+1 serves as an opportunity for the UK and Europe to analyse what went well, what went wrong, and how to adapt those lessons for its own transition.
“Two big lessons for me from the US were automation and communication,” says Douglas, emphasising the importance of good communication in the market to get the message out, but also between service providers and suppliers.
“Settlement is just the final activity in a long chain of activities which are all linked,” he notes.
Carpenter points out that the initial increase of partial settlements the US saw — while it can reduce the value of unsettled trades — does not necessarily bring numbers down and creates more processing work. “It is not a long-term solution,” he states.
Another key example the UK and Europe can use to their advantage, is the importance of testing connections sooner, and doing more upfront.
“Earlier trade affirmation is a useful US lesson: the more that is done upfront, the cleaner the trades and the fewer issues later,” says Carpenter.
Bejar Nuñez suggests the clearest lessons to be learned surround the importance of early testing and smooth coordination by all parties involved. “Compressing the settlement cycle leaves far less room for manual intervention, so high levels of straight-through processing become increasingly important,” he says.
Sekhon emphasises that the UK should use the time it has left before implementation to “thoroughly test all the connections between systems”. He explains that if matching, reconciliation, and exception management processes happen sooner and automatically, companies have less to worry about when the settlement window shortens.
This is highlighted by Douglas’ final lesson learned from the US’s transition to T+1: avoid complacency.
Looking ahead and next steps
The question still remains, what exactly do firms need to do in the coming months? The consensus across the industry, while perhaps obvious, is be prepared.
“There is only one group of people who know what an individual firm should do, and that is the people within the individual firm,” says Douglas. He implores people to communicate and make use of resources available to them.
Val Wotton, managing director and global head of equities solutions at DTCC, agrees, highlighting that while there has been significant progress, there is still important work to be done. “Achieving a successful transition will require continued industry-wide engagement, preparation, and coordination across the trade lifecycle,” he says.
Fernando observes the real pressure isn’t the deadline, but leaving preparations too late. “Banks that move now will gain an edge,” he says. “T+1 is not just a regulatory requirement but a genuine opportunity to innovate.”
There is still plenty of time for every firm to be ready when the clock strikes zero on the T+1 settlement countdown. The key is to communicate, educate within your firm on what procedures fit, and not to leave it all to the last second.
“Really, the secret to this is preparation,” Douglas says. “It is rather like decorating a wall; the success of the final product is determined by the preparation that you put in.”
Now, with less than one year to go, market sentiment is that while there is still much work left to be done, most are on pace.
Progress as it stands today
Tokenovate reported in September that of post-trade professionals surveyed, 83 per cent said their firms are prepared for the October 2027 deadline, but only 32 per cent described operations as fully prepared.
On the surface, this discrepancy seems alarming as there is a big difference between feeling prepared and actually being prepared. Andrew Douglas, chair of the UK T+1 Accelerated Settlement Taskforce (AST), was able to give some further context, explaining that despite the gap he believes the market is in a good place.
“At the moment, I am comfortable that the industry is working at pace,” says Douglas. “In our most recent engagement survey, it showed that 83 per cent of the market were engaged in the project. In the US at the same point, it was about 50 per cent, so we do have a significantly higher level of engagement.”
Douglas explains that digging into the data showed asset managers averaged 57 per cent engagement, but explains, part of the reason he believes it is lower is due to asset managers frequently outsourcing services, whether it is the custodian or an independent third party. This outsourcing could be the cause of lower engagement as asset managers might assume someone else in their network is more responsible for the transition. Assumptions can be a dangerous thing, however, and firms are being urged that communication and cooperation is key.
“Ultimatley, Europe will only be ready if the whole ecosystem — from counterparties and custodians to CCPs, CSDs, and vendors — can operate within the same compressed timetable,” says Francisco Bejar Nuñez, head of custody at SIX, emphasising cooperation between all parties is the key to success.
Daniel Carpenter, CEO of Meritsoft, highlights that T+1 brings a “fresh urgency” to settlement inefficiencies that have existed for a long time.
“Firms need to look at their processes end to end and ask: why trades are failing, where are the breaks, what are the costs, and what has to change? No firm can solve this alone,” he says. “Settlement involves counterparties, custodians, and other providers, so communication and working together are essential.”
Carpenter offers some additional insight, stating: “Meritsoft has had many conversations with banks, brokers, and custodians over the past 12–18 months and while everyone is acutely aware of the implementation deadline, T+1 is one of several technology projects competing for attention and budget.”
“That is changing and today firms are significantly further forward in their own preparations,” he notes.
Douglas too remains hopeful. “I am very optimistic that the market will be ready in October.”
Implications of accelerated settlement
The fact that the world is turning to digitisation and automation cannot be avoided. The move to T+1 also suggests a subsequent move to T+0, or instant settlement.
“T+0 and atomic settlement are longer-term ambitions, and I think the focus should be on getting T+1 right first,” says Carpenter.
“There is still too much legacy infrastructure and there are too many different systems to move straight to instant settlement, but the current focus on achieving the settlement efficiency gains required for T+1 take the industry further down that road,” he notes.
Much of the industry agrees; building infrastructure and processes with T+0 in mind, but focus on proper execution of T+1.
Gus Sekhon, vice president of strategy at FINBOURNE Technology, suggests: “T+0 should influence the architecture firms build today, but the industry should not assume that instant settlement is automatically the optimal destination for every market or asset class.”
He explains that having modern and flexible data systems while automating more tasks gives companies the ability to adjust. “This way, they can be ready for whatever happens next.”
Bejar Nuñez reiterates this, stating, “Longer term, the question should be where instant settlement provides a genuine economic benefit rather than whether every transaction needs to settle instantly.”
Douglas agrees that a T+0 settlement timeframe is in the future, stating, “it will be here quicker than we perhaps think.”
He clarified that there is work to do in terms of agreeing what instant settlement means and highlights that, “when it gets to a tokenised world, we need the ability to match the asset to the payment rail.”
There is also caution surrounding leaving no time for netting; handling trades individually is proving increasingly obsolete, especially with such a shortened window.
Automation is the answer
With under 12 months left to get prepared for the transition, many firms are working out how best to approach it. Automation of processes seems to be the key. Manual processing is no longer viable, as according to the Association for Financial Markets in Europe (AFME) operational hours under T+1 drop from around 12 hours to 2.
“Now, the main focus should be on finding out where companies still depend on manual work, scattered information, and any batch based processes,” says Sekhon.
Douglas wholeheartedly agrees. “Our message from day one has been very clear: automate, because you’re going to have to do it eventually.” He highlights that the estimate of global capital markets on T+1 is between 60 and 70 per cent, and with the move of the UK and Europe the percentage will rise to 80 to 90 per cent. “The writing is on the wall,” Douglas emphasises, “If you are relying on manual processes, you are going to be in trouble at some point.”
Cian Fernando, CEO at Aqua Global, reiterates this explaining that many banks still run on legacy infrastructure that simply cannot settle trades fast enough.
“If they do not modernise soon, they will face failed settlements, cash penalties, funding pressure, and operational strain,” notes Fernando.
There is no one answer to how firms should automate their processes and address other changes needed for the T+1 deadline, as nuance exists for each individual firm’s focus.
Recently the AST published an Implementation Toolkit which includes a readiness scorecard, checklist, practical control expectations, and guidance for firms on procedures that could be useful to introduce or update.
The recommendations are not prescriptive, and Douglas emphasises there is no single way to address the settlement transition.
He does, however, advise firms to avoid throwing people at the problem. “We saw in the US that this does not end well, and the reality is that you will still have to do the automation anyway.”
Carpenter highlights this, stating that while the US’s transition to T+1 was broadly successful, there are still people manually processing trades to prevent fails.
He observes that, “US operational costs have not returned to pre-T+1 levels, and some firms have simply absorbed the extra staff costs.”
What can be learnt
The US’s recent transition to T+1 serves as an opportunity for the UK and Europe to analyse what went well, what went wrong, and how to adapt those lessons for its own transition.
“Two big lessons for me from the US were automation and communication,” says Douglas, emphasising the importance of good communication in the market to get the message out, but also between service providers and suppliers.
“Settlement is just the final activity in a long chain of activities which are all linked,” he notes.
Carpenter points out that the initial increase of partial settlements the US saw — while it can reduce the value of unsettled trades — does not necessarily bring numbers down and creates more processing work. “It is not a long-term solution,” he states.
Another key example the UK and Europe can use to their advantage, is the importance of testing connections sooner, and doing more upfront.
“Earlier trade affirmation is a useful US lesson: the more that is done upfront, the cleaner the trades and the fewer issues later,” says Carpenter.
Bejar Nuñez suggests the clearest lessons to be learned surround the importance of early testing and smooth coordination by all parties involved. “Compressing the settlement cycle leaves far less room for manual intervention, so high levels of straight-through processing become increasingly important,” he says.
Sekhon emphasises that the UK should use the time it has left before implementation to “thoroughly test all the connections between systems”. He explains that if matching, reconciliation, and exception management processes happen sooner and automatically, companies have less to worry about when the settlement window shortens.
This is highlighted by Douglas’ final lesson learned from the US’s transition to T+1: avoid complacency.
Looking ahead and next steps
The question still remains, what exactly do firms need to do in the coming months? The consensus across the industry, while perhaps obvious, is be prepared.
“There is only one group of people who know what an individual firm should do, and that is the people within the individual firm,” says Douglas. He implores people to communicate and make use of resources available to them.
Val Wotton, managing director and global head of equities solutions at DTCC, agrees, highlighting that while there has been significant progress, there is still important work to be done. “Achieving a successful transition will require continued industry-wide engagement, preparation, and coordination across the trade lifecycle,” he says.
Fernando observes the real pressure isn’t the deadline, but leaving preparations too late. “Banks that move now will gain an edge,” he says. “T+1 is not just a regulatory requirement but a genuine opportunity to innovate.”
There is still plenty of time for every firm to be ready when the clock strikes zero on the T+1 settlement countdown. The key is to communicate, educate within your firm on what procedures fit, and not to leave it all to the last second.
“Really, the secret to this is preparation,” Douglas says. “It is rather like decorating a wall; the success of the final product is determined by the preparation that you put in.”
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