The Investment Association (IA) – the trade body for the UK investment management industry –has published an industry roadmap designed to help firms prepare for the move to a trade-date-plus-one (T+1) settlement cycle across the UK, EU and Switzerland.
66% of UK investment firms say they are already in active preparation mode for T+1, according to IA research produced in collaboration with Asset and Wealth Management Consultancy Alpha FMC.
The report is aimed at asset managers, wealth managers, fund administrators and custodians. It provides guidance on how firms can prepare for the planned shift from T+2 to T+1 settlement, currently slated for 11 October 2027.
While existing regulatory guidance, such as the UK Accelerated Settlement Taskforce, focuses on market-wide principles, the IA’s report concentrates on downstream impacts, with emphasis on fund operations and cash management.
It highlights that the move to T+1 will compress timelines for trade confirmation, exception management, funding and collateral processes, representing “the most significant operational shift in European post-trade processing in decades.”
The IA’s recommendations include acting now to establish clear project plans, governance frameworks and budgets; accelerating automation across the post-trade lifecycle; reviewing and strengthening foreign exchange operating models; preparing to move fund settlement cycles to T+2 by October 2027; and ensuring the accuracy and completeness of Standard Settlement Instructions.
What Europe can learn from the US T+1 transition
Galina Dimitrova, director of investment and capital markets at the IA, said: “With less than two years left until go-live, investment managers are at an important juncture with their T+1 implementation. 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.”
Andrew Douglas, chair of the UK Accelerated Settlement Taskforce, said: “I welcome this timely paper from the Investment Association which offers practical and pragmatic advice on a successful transition to T+1. I encourage all IA members to follow this guidance.”
Conor McKenna, director at Alpha FMC, said: “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.”
