There are still issues to be ironed out before the UK and Europe can follow the US to T+1, according to speakers at this year’s Fixed Income Leaders Summit (FILS) Europe – but some in the industry are impatient to get things moving, and abandon coordination across jurisdictions.
“We’ve been very clear in the reports that our preferred option is for the UK, EU and Switzerland to move to T+1 together, in Q4 2027” affirmed Andrew Douglas, chairman of the UK T+1 Taskforce Technical Group. “However, since the US went live, we’re facing an increasingly vocal lobby in the UK to bring it forward to 2026, because the dislocation of the UK and US settlement cycle is proving to be quite problematic for the buy-side community.”
SEC Chair Gary Gensler has advised the UK to “pick a date and stick to it” when it comes to making the jump to T+1—and the country aims to do exactly that. Despite pressures, “we will be going by the end of 2027,” he stated, “probably sometime in September”.
Beyond this statement from the chair, there are a number of lessons that can be taken from the North American T+1 transition earlier this year.
“We’ve spent a lot of time looking at what worked and what didn’t work as well as it could have,” Douglas reported. “One of the biggest learnings from the US was that scope was only confirmed three months before go-live. We felt this wasn’t long enough for the market to understand what they needed to do. People are looking for clarity and certainty – what they have to do, and when they have to do it by.”
From a European perspective, “coordination would be ideal but we also need to be pragmatic,” warned Inés de Trémiolles, global head of trading at BNP Paribas Asset Management. Going by asset class rather than adopting a big bang approach could be more effective here, she opined. The fragmented nature of European markets is proving challenging in the implementation of T+1.
“It is difficult to find consensus when there are so many people at the table,” de Trémiolles continued,
Different groups have different requests for the transition, and she suggested that a public agent needs to take initiative and gather industry bodies together in order to push the shortened settlement cycle forwards.
Renaud Lelong, global head of FIC financing at Société Générale Global Markets, agreed that moving to T+1 is “much more complicated“ in the EU than in the UK or US.
“We are dealing with a potential move that includes the need to upgrade a lot of technology,” he said, drawing attention to the transfer of cost that the transition would prompt. “There are risks associated with the move that have to be cleared before T+1 can happen,” he concluded.
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