The Investment Association (IA) has published a report outlining its roadmap for the transition of the UK and EU securities market from a trade date plus two (T+2) to a trade date plus one (T+1) settlement cycle.

Its T+1 Settlement: Navigating the UK, EU and Swiss Transition report, which was produced in collaboration with Alpha FMC, aims to support wealth managers, asset managers, fund administrators, and custodians in transitioning to T+1, which is currently targeted for 11 October 2027.

With just 66 per cent of UK investment firms actively preparing for T+1, according to research from ValueExchange, the report aims to build understanding of the challenges presented by the transition, to support planning across the European market.

It complements existing regulatory documentation by focusing specifically on the downstream impacts to fund and cash operations.

The IA said the switch to T+1 would “drastically compress” the time available for trade confirmations, error resolutions, funding as well as collateral management, and represented the most “significant operational shift” in European post-trade processing in decades.

The report urged firms to act and ensure that project plans, governance, and budgets were in place; accelerate automation across the post-trade lifecycle; review and strengthen FX operating models; and ensure the accuracy and completeness of Standard Settlement Instructions.

“With less than two years left until go-live, investment managers are at an important juncture with their T+1 implementation,” said IA director of investment and capital markets, Galina Dimitrova.

“In addition to achieving the agreed regulatory milestones and ensuring compliance, firms have a critical opportunity to use this transition as a strategic initiative and a catalyst for post-trade modernisation.

“Our report ensures firms have a practical and actionable roadmap to go through all critical implications of T+1 on operating models and we urge firms to use it to kickstarts implementation, reduce operational risk, and strengthen the resilience and efficiency of the post-trade operating model for the long term.”

Alpha FMC director, Conor McKenna, added: “T+1 should be viewed as a catalyst for modernising post-trade operating models rather than a pure compliance exercise.

“Firms that succeed will use this window to simplify processes and enhance scalability across investment operations, fund operations and securities financing.”

The T+1 Accelerated Settlement Taskforce, which recently published its quarterly review, welcomed the report, with its chair, Andrew Douglas, stating: “I welcome this timely paper from the IA which offers practical and pragmatic advice on a successful transition to T+1. I encourage all IA members to follow this guidance.”

---