The Financial Conduct Authority (FCA) and the Bank of England have confirmed that they will publish a joint roadmap on tokenisation in November, ahead of the upcoming T+1 settlement deadline in October 2027.
Specifically, the roadmap will address key operational weaknesses and market fragmentation in UK and European capital markets.
The announcement is expected to form a foundation to support firms in keeping the pace ahead of the T+1 transition and is set to accelerate a shift towards digital market infrastructure in the UK.
The joint initiative has already received support from industry leaders. Richard Baker, chief executive and founder of Tokenovate and member of HM Treasury’s Wholesale Digital Markets Industry Taskforce, commented: “As we move towards digital market infrastructure, the priority must be making the entire post-trade lifecycle programmable, from standardised data and contractual obligations through to the final movement of cash and assets.
“This provides firms with a practical route towards continuous settlement, where capital can be mobilised when it is needed rather than sitting idle between transactions.”
The UK will transition to T+1 settlement on 11 October 2027, and Sarah Pritchard, deputy chief executive of the FCA, also confirmed that the regulator will take action against firms that fail to prepare for the shift.
Read more – ‘So much at stake’: European bodies show concern about asset manager readiness for T+1
“The gap between market ambition and operational reality must be closed,” Baker added.
“Firms can no longer afford to rely on manual processes and fragmented systems to manage increasingly compressed settlement windows. Every reconciliation delay and operational hand-off becomes a greater source of risk when there is less time to put things right.”
Readiness for the transition to T+1 has been a top concern across the industry recently, and in early October, the EU T+1 Industry Committee and the European Fund and Asset Management Association (EFAMA) wrote directly to compliance officers at asset management and alternative investment firms.
The two bodies made clear their decision to intervene, and the committee’s industry readiness survey found that “further progress is needed in some areas particularly [for] smaller and mid-sized firms.”
In a similar vein, The TRADE also spoke with industry experts from DTCC, Bloomberg, Saphyre, and Connor, Clark & Lunn in the ‘T+1 in Europe: Are asset managers ready for the shock?’ webinar this week.
The webinar unpacked the current landscape less than a year from the deadline and assessed the level of preparation for small-to-medium sized buy-side firms.