UK government approves transition to T+1 in securities finance regulation news

The UK government has approved the transition to a T+1 settlement cycle following a report from the Accelerated Settlement Taskforce (AST), marking a significant step towards modernizing the country’s financial markets. The report, chaired by Charlie Geffen, outlines the benefits of moving to a faster settlement period, including improved market resilience, cost savings for investors, and reduced risks associated with extended trading and settlement periods.

HM Treasury has accepted all recommendations from the report and aims to transition to T+1 by the end of 2027. The government emphasizes the importance of harmonizing settlement cycles with major financial centers to benefit market participants. Additionally, a Technical Group chaired by Andrew Douglas has been established to oversee the implementation of the transition, with industry experts tasked with developing the necessary technical and operational changes.

The Association for Financial Markets in Europe (AFME) has welcomed the government’s decision and supports the move towards a T+1 settlement cycle. AFME’s CEO, Adam Farkas, emphasizes the need for a coordinated approach across the UK, EU, and other European jurisdictions to reach a pan-European consensus on timing. Farkas also calls for detailed technical analysis to determine the appropriate implementation date and any broader market changes needed to facilitate T+1.

Overall, the government’s approval of the transition to T+1 settlement cycle is seen as a positive development for the UK financial markets, with industry experts and stakeholders expressing support for the move towards faster and more efficient settlement processes.