Technical and regulatory questions surround Europe’s T+1 move
Last year, all eyes were on North America, as the United States, Canada, and Mexico moved from T+2 to T+1 settlement. The move has been hailed as a success, but now the pressure is on across the Atlantic.
The UK, Europe, Switzerland, and Liechtenstein will all move from T+2 to T+1 on October 11, 2027. The UK Accelerated Settlement Taskforce issued its implementation plan in February while the EU released its roadmap for the transition on June 30, containing expectations and guidelines for the meantime.
But sources say that the amount of back-office automation needed is a huge undertaking—something that not even the US accomplished in its own move—and despite more time, strict deadlines and non-mandatory regulatory recommendations create further question marks.
If there is one area in which the US fell short, sources say it was automation.
Kaisha Schnoll, vice president of trade settlements at STP Investment Services, says she still sees custodians and brokers without this automation today. “That’s just not going to be able to happen in a T+1 environment,” she says.
As markets continue to streamline their operations, workflows that rely on email and faxes to send information will increasingly not be up to the task. Schnoll says that automated settlement instruction mechanisms, like the Depository Trust & Clearing Corporation’s Alert service, can cut down on the number of PDFs used in these cases.
Read more from Kaisha and other experts in Waters Technology.
