Laura WilesThe Accelerated Settlement Taskforce (AST) Technical Group has published its final report on T+1, setting out a detailed plan for the UK to move to faster settlement of securities trades. The report recommends – and the Government accepts – that T+1 should come into effect on 11 October 2027.
In practice, T+1 would mean that in a standard securities trade, the buyer would received the securities and the seller would receive payment the day after the trade is agreed, rather than the current two-day standard.
The AST report recommends 12 ‘critical’ and 26 ‘highly recommended’ actions to facilitate a successful transition to T+1. The Government has accepted all of the recommendations, many of which are aimed at market participants, and will be implemented through a new code of conduct. When there is parliamentary time to do so, the Government will bring forward secondary legislation to amend the current T+2 requirement under the UK Central Securities Depositories Regulation.
The report also recommends that the AST should oversee implementation of the recommendations therein until the transition has been successfully delivered, and briefly afterwards in order to assess the short-term impacts. The Government agrees with this approach, and has updated the terms of reference on the objectives and governance structure for the next phase.
The FCA has also welcomed the final report, and supports the move to a T+1 settlement. The regulator has also published a new webpage setting out the background to T+1 settlement, and its expectations on firms in the run up to implementation, emphasising the importance of planning early.