FCA calls on firms to prepare for T+1 settlement

With two years until the UK transitions to T+1 settlement on 11 October 2027, the FCA has called for firms to start their preparations for the shift, outlining what it has heard from the industry and what good preparation will look like.

The FCA notes five key points:

• Firms should strengthen inventory management, so that they can access securities quickly;
• Firms should review end-to-end settlement arrangements to ensure they can support T+1;
• Automation where appropriate will be key for most firms;
• Successful transition in the US will not guarantee success in the UK, as there are key differences in implementation; and
• Clients and counterparties should be engaged early.

Good practice the FCA has seen already includes: carrying out end-to-reviews of their trading, clearing and settlement arrangements; priorities client outreach to identify necessary changes; using detailed T+1 impact assessments to identify necessary changes and secure funding; and identifying where manual arrangements are delaying settlement.