With the October 2027 deadline approaching, industry executives warned that preparations remain uneven, particularly among smaller firms and across fragmented markets.Speaking on Citi’s webinar ‘One year to T+1 and the final roadmap’, Andrew Douglas, chair of the UK Accelerated Settlement Taskforce, Giovanni Sabatini, chair of the EU T+1 Industry Committee, and Florentin Soliva, chair of the Swiss Securities Post-Trade Council, warned that smaller asset managers, differences in market infrastructure and cross-border settlement flows remain potential weak points in Europe’s transition to next-day settlement.
Douglas said: “Settlement is the final activity in a chain, and you are only as strong as the weakest link.”
The numbers expose the readiness gap
The EU’s latest readiness survey, published in July, found that 86% of respondents were aware of the initiative, while 83% were actively preparing for the move. In the UK, 89% of respondents to the latest survey were preparing for the change.
However, progress remains uneven. Sabatini pointed to smaller asset managers and some market infrastructures in central European member states as areas where preparations were lagging, warning that “there is no time for complacency” as the industry approaches the final stretch.
UK asset manager engagement has also improved, rising from 57% in the first-quarter survey to more than 70% in the third-quarter results. However, Douglas cautioned that participation in the process should not be confused with being ready to make the switch.
“The survey actually showed hardly anyone is ready. Because I don’t want people to take their foot off the accelerator. We are on the final straight now,” Douglas said.
He stressed that while industry taskforces could coordinate preparations, individual firms remained responsible for their own readiness.
“My job and the job of the task force is to get UK PLC over the line. It’s not to get individual firms over the line. That’s your responsibility for the firms that you work for,” he said.
Douglas also urged firms to take a data-led approach to their preparations, using existing settlement information to identify operational weaknesses rather than launching major new automation programmes at this late stage.
In the UK, 87% of settlement instructions received by CREST were already arriving by the T+1 deadline, he said, giving firms a benchmark against which to assess their own performance.
“Data is your friend. If you can’t measure it, you can’t manage it,” Douglas said.
Cross-border risks remain
Firms may be prepared for T+1 in their domestic markets, but the picture becomes more complicated when transactions cross borders. Different settlement practices, infrastructure and local market requirements will all need to be factored into the transition.
Douglas said coordination between the UK and EU had been central to preparations, helping firms avoid having to develop separate solutions for each jurisdiction.
“One migration was better than three migrations. One operational solution to a problem is better than three separate ones,” he said.
However, aligning the transition does not mean eliminating differences between markets. Sabatini noted that variations persist even within the EU, including across central securities depositories (CSDs) and settlement timetables. Custodians will need to ensure clients understand these local requirements to minimise disruption to cross-border transactions.
Corporate actions also remain a concern, with differences in market practices, particularly around market claims, requiring further attention, Soliva said.
Making the move isn’t enough
Meeting the October 2027 deadline is one thing; ensuring markets can settle smoothly under the new timetable is another. For Douglas, the real measure of success will only become clear once the new cycle is in operation.
“The question I think on the day will be the quality of the move, not whether the move has happened,” he said.
With the transition weekend fast approaching, Sabatini urged firms not to let preparations lose momentum, stressing that the coming months would be critical.
“We are now at the crux. Now is the time where you have to put all your commitments, all your efforts because there is real short time from here to the transition weekend,” he said.