The UK T+1 Taskforce technical group has earmarked October or November 2027 as the date for a switch to an accelerated settlement cycle in the UK.
Andrew Douglas
Speaking at the InvestOps Europe conference in London, Andrew Douglas, chair of the technical group, said that the dates were narrowed down via the process of elimination – excluding key public holiday, dividends and rebalancing dates.
The technical group will be publishing its full report for a UK switch to T+1 later this week – which will include 59 recommendations across the settlement and investment value chain.
Following the publication of that report, there will be a period of consultation until the end of the year, before the UK government is expected to formally adopt the proposals.
Regarding potential alignment with Europe, Douglas explained that the ball is now in the court of the EU, with the UK now set on its course.
“I want to reframe that dialogue [around the UK aligning with the EU],” said Douglas. “The UK has decided when it’s going to go. The choice now is with Europe and Switzerland to align with the UK – that is what we are waiting for. We’ll wait for the much-publicised report from ESMA, but I know their headspace is ‘how can we create a solution that would align with the UK?”.
“I’m confident that things are heading in the right direction and heading towards convergence – but convergence is not a prerequisite for the UK to adopt T+1.”
ESMA’s report is scheduled to be published by 17 January 2025, though that date could potentially be expedited, with a view to providing market participants with as much time as possible to prepare for its outcomes.
On what potential misalignment would mean, Valentino Wotton, managing director and general manager of Institutional Trade Processing (ITP) at DTCC, said: “Misalignment when it comes to ETFs, funding, corporate actions, recall, will be painful. What’s very clear is that the entire industry, whichever segment you’re in, has that desire is for alignment. The mood does seem to be positive around trying to do that, but there’s complexities in Europe given the number of CSDs and CCPs involved.”