As Europe moves towards T+1 settlement, firms can no longer treat standard settlement instructions (SSIs) as an afterthought, says Matt Johnson, executive director, DTCC.
It’s easy to underestimate how operational timelines are reduced under T+1. “People often view the move from T+2 to T+1 as a reduction in transaction processing time of 24 hours,” Johnson said. “However, when you factor in cross-border settlement challenges, multiple Central Securities Depositories (CSDs) and central counterparties (CCPs), in addition to the complexity of operating across different time zones and currencies, the window shrinks by 80%.
Many still view SSI data as static reference data rather than a core settlement function, but transactions cannot settle with incorrect SSIs,” Johnson said, comparing incorrect SSIs to attempting a bank transfer online without account details. “Under T+1, if a firm enters an inaccurate SSI, there is much less time to correct it and apply it to the transaction,” he said. Integrating SSIs earlier into onboarding and KYC processes can reduce friction across execution, matching and settlement workflows. “It makes the whole execution, trade capture, matching and settlement process smoother if you’ve captured that accurate data early in the trade lifecycle,” Johnson said.
The EU T+1 Industry Committee requires SSIs to be submitted on the trade date (T+0), meaning firms must agree on trade details before instructing custodians or CSDs. Johnson noted that DTCC’s post trade solutions (allocation, confirmation and settlement workflows) allow firms to agree on settlement details, including where trades will settle (the Place of Settlement or PSET) and how trades will settle, on the trade date. This allows trades to move smoothly into CSDs as T+1 deadlines tighten.
Settlement risks under T+1
Inaccurate or delayed SSIs can quickly create downstream issues for counterparties and custodians, operational bottlenecks, increased manual intervention and ultimately settlement failure. “DTCC’s SSI database – ALERT®– not only stores SSIs but applies a unique “golden source” model to SSI management. This means the majority of SSIs in ALERT are managed directly by the owner of the SSIs — custodians and prime brokers,” Johnson said, highlighting that when settlement instructions come directly from the settlement instruction owner, data quality is significantly higher and the risk of settlement failure is reduced.
Manual SSI verification requires a callback process where firms must confirm SSIs directly with clients. This process is inherently resource heavy and error prone. According to Johnson, ALERT is designed to remove this requirement by providing a central source of over 17 million global, fully validated settlement instructions, and automating the process of applying these SSIs to every trade. All settlement instructions in ALERT fully comply with the Securities Market Practice Group and Financial Markets Standards Board’s principles.
Even highly automated firms remain exposed if their counterparties continue to rely on spreadsheets, PDFs and emails to share SSIs, added Johnson. According to a UK T+1 survey conducted by The ValueExchange in Q1 2026, 51% of firms have already automated settlement instruction processing. This leaves a “manual long tail” representing almost half of firms that do not have suitable post-trade processes in place and urgently need to invest in the automation required to meet T+1 timelines.
To address this issue, in 2025 DTCC launched a packaged solution for low volume firms with fewer than 400 trade allocations per month, providing access to DTCC’s trade matching platform, CTM®, and the ALERT SSI database. “We know resourcing and cost constraints can make post-trade automation seem out of reach for lower-volume firms. This solution addresses that issue. By leveraging CTM and ALERT, our clients already match trades on T+0, with a 98% same day match rate, and are essentially T+1 ready,” noted Johnson.
Preparing in 2026
Under recommendations linked to Europe’s T+1 transition, allocations and confirmations for European transactions are expected to be completed on T+0, with firms working towards cut off times of 11:00 pm CET for European transactions and 11:59 pm UK time for UK transactions. “Those recommendations and deadlines come into play in December this year,” Johnson said. “Firms that haven’t already started to automate and optimise their post-trade processes are running out of time.
