Taskforce Sets T+1 Settlement Efficiency Rate Target

§ 01 Executive Snapshot

• What: The Taskforce has set a target settlement efficiency rate for the T+1 settlement system launching on October 11, 2027.
• Who: UK Accelerated Settlement Taskforce, chaired by Andrew Douglas.
• Why it matters: Establishing a target settlement rate is crucial to ensure market efficiency and reduce settlement failures during the transition from T+2 to T+1.

§ 02 Key Developments

• The target settlement rate will be based on the average from the three months leading up to the go-live date (July, August, September 2027).
• The target aligns with Recommendation SETT04 from the AST’s Final Report published in 2025.
• The AST will publish a rolling 3-month average settlement rate using CREST data starting in 2027 to support firms in their preparation.

§ 03 Strategic Context

• The initiative reflects a shift towards a more efficient settlement process, moving from the traditional T+2 to a faster T+1 system.
• This transition is part of broader efforts to modernize financial markets and improve operational efficiencies across the industry.

§ 04 Strategic Implications

• Immediate implications include the need for firms to adapt their processes and technology to meet the new settlement timelines effectively.
• Long-term implications involve the potential for improved market liquidity and reduced operational risks if the T+1 transition is successful.

§ 05 Risks & Constraints

• Potential risks include the possibility of increased settlement fails if firms do not adequately prepare for the T+1 transition.
• There are also challenges related to the automation of processes, which is critical for meeting shorter settlement deadlines.

§ 06 Watchlist / Forward Signals

• The Taskforce will begin publishing the rolling 3-month average settlement rate in 2027, which will serve as a key performance indicator.
• Milestones set out in the Implementation Plan of February 2025 will be critical for firms to meet in order to ensure a successful transition to T+1.