Britain Confirms 11 October 2027 Move to T+1 Settlement
What Did the UK Announce About T+1 Settlement?
The UK has taken its next major step toward accelerating how securities move through its markets, publishing draft legislation that will shift the country’s standard settlement cycle from T+2 to T+1 on 11 October 2027. The move aligns London with North America’s quicker settlement regime and signals that the government is determined to keep the City competitive in global markets.
HM Treasury released a draft Statutory Instrument amending the UK’s post-Brexit Central Securities Depositories Regulation. The Financial Conduct Authority issued a joint statement urging market participants to review the text and begin preparations, emphasizing that firms should not wait for the final legal version to begin operational planning.
Today, most settle on T+2, providing two business days to affirm trades, manage foreign-platform flows, deliver cash and transfer securities. Cutting that window in half will require banks, brokers, custodians, asset managers and infrastructure providers to compress workflows that have been built around decades of T+2 operations.
Investor Takeaway
How Did the UK Reach the Decision?
The draft legislation caps a multi-year effort. In 2022, the Treasury formed the Accelerated Settlement Taskforce to evaluate whether London should follow the United States toward quicker settlement. The group—led by former Ashurst senior partner Charlie Geffen—brought together major trading venues, large asset managers, global banks, custodians and infrastructure providers.
The taskforce’s March 2024 report recommended a move to T+1 by the end of 2027, citing three main benefits:
- Lower counterparty risk. Moving from two days to one cuts the exposure window for unsettled trades.
- Reduced capital tied up in margin. Shorter cycles lower the collateral demands at central counterparties.
- Global competitiveness. Without T+1, London risked becoming an operational outlier.
Its final implementation blueprint in February 2025 set 11 October 2027 as the target date and listed dozens of required operational changes, including:
- earlier trade allocation deadlines
- quicker trade confirmations
- automation of standing settlement instructions
- accelerated stock-loan recalls
One participant described the cultural shift as “an action-this-day mindset,” highlighting the rapid adoption required across the post-trade ecosystem.
The Treasury endorsed the recommendations rapidly. The draft Statutory Instrument now begins the formal legislative process, though the direction is effectively locked in.
Why Is London Pushing to Catch Up?
The UK’s timeline follows the United States’ successful transition to T+1 in May 2024, which Canada and Mexico adopted simultaneously. described the shift as smooth, with only isolated ahead-week processing issues.
North America’s move immediately raised pressure on other major financial centers. Investors now transact across regions that settle on diverse timelines, creating cash-management friction when one leg of a trade settles a day earlier than another.
The UK taskforce warned that if London stayed on T+2, it risked becoming “the odd one out,” especially for across US, European, Middle Eastern and Asian markets.
The Treasury echoed this concern, noting that London could not afford to fall between New York (already T+1) and Brussels (still evaluating the timeline). ESMA’s advisory group has also warned that European ETFs and parts of the bond market could face disruption if Europe does not move to T+1 with appropriate secureguards.
Investor Takeaway
What Challenges Will the Industry Face?
Supporters highlight clear benefits, but the shift compresses timelines across the financial system. Key friction points include:
- FX settlement pressure. Global asset managers will have less time to execute foreign-platform trades to fund equity purchases.
- Legacy infrastructure constraints. Many brokers and custodians still rely on manual processes that cannot support one-day cycles.
- Time-zone stress. Investors in Asia will need to affirm trades even earlier to meet UK deadlines.
- Stock-loan recalls. Shorter windows increase operational risk for lending programs.
Euroclear UK & International, operator of CREST, will need to revise rulebooks, workflows and cut-off times. Asset managers and automation to reduce the risk of failed trades.
What Happens Next?
Nothing changes immediately. The draft law is open for technical comments until February 2026, with a final version expected later that year. But regulators say firms should begin their transition now.
The FCA emphasized that the draft provides “sufficient clarity” for firms to map operational, funding and technological changes well before the 2027 deadline.
