I wanted to use this opportunity to summarise some of the work we have led on over the last few months, working alongside our members and industry partners.
When ISLA asked me to lead on their Accelerated Settlement work, I saw it as a welcomed break from the nebulous that was SFTR. Two years, hundreds of working group calls, thousands of document pages and one blog post later, I’ve realised that the scale of this transition is even more profound than we first imagined.
The shift to a T+1 settlement cycle is one of the most significant structural changes to the European and UK post-trade landscapes. The fragmented nature of these markets with complex regulatory requirements and multiple trading venues have made the last two years a true journey of discovery underpinned by collaboration and the occasional compromise.
While much of our initial work has focused on high-level advocacy and regulatory roadmaps, and as we enter the final 18 months, our prioritisation has shifted to practical implementation and operational readiness. I wanted to use this opportunity to summarise some of the work we have led on over the last few months, working alongside our members and industry partners.
The Roadmap to October 2027
Last year, the UK and EU aligned their transition dates to 11 October 2027. This alignment was critical for maintaining the global competitiveness of the respective capital markets and reducing systemic risk. Since then, the regulatory focus has evolved from the ‘what’ to the ‘how’ with a number of workstreams set up to help drive industry engagement and action. Through the UK and EU SFT (Securities Finance Transaction) Workstreams, of which ISLA are leading members, several recommendations were put forward for our markets:
- In the UK: The government accepted all SFT recommendations, covering Automation, Recalls & Returns and Post-Execution Order Instructions. All relevant updates are now reflected in the ISLA Best Practice Handbook.
- In the EU: SFTs were a key focus with almost thirty recommendations put forward by the SFT workstream with twenty-two published in the EU T+1 Securities Settlement Handbook published in February 2026 to act as a ‘live document’ for practical guidance.
Through these work streams we were also able to advocate for and secure a number of regulatory wins. A major win being the political agreement in mid-2025 to explicitly exempt SFTs from certain mandatory settlement cycle requirements. This preserved the essential flexibility for lending markets that would have otherwise been impacted by rigid T+1 mandates.
This was followed by an operational breakthrough in the UK with CREST agreeing to support same-day settlement of Stock Loan Returns (SLRs) which is a fundamental technical requirement for T+1 readiness. We have recently been informed that this will go live on 15 June 2026, following an industry consultation, of which ISLA was the only trade association to respond.
Front Office Focus
For the securities finance industry, the transition is not just a back-office challenge, it’s also a fundamental change to how trading desks manage liquidity, inventory, collateral and funding; this understanding has shaped the core focus of our work in 2026 so far.
To support our members through this pivot, ISLA hosted an exclusive T+1 Roundtable event for front office team members and traders on 16 April 2026. Moderated by Alessandro Cozzani (Chair, ISLA Board of Directors), we welcomed over 30 traders from across 23 firms, for an interactive discussion that moved beyond theory.
Throughout the day, we addressed the compression of operational timelines and the resulting intraday liquidity pressures. The room engaged in a deep dive into the constraints of RQV (Required Value) confirmation, the risks of misaligned execution and settlement, and the looming complexities surrounding corporate actions and dividend entitlements under a T+1 regime.
We also tackled the practical hurdles of USD cash settlement versus borrowing European securities, including the industry’s heavy reliance on Fedwire and SPO mechanisms. The consensus was clear: there is no ‘silver bullet’ – success will require a blend of disciplined advocacy and a commitment to automation to ensure our infrastructure can handle a shortened cycle.
The event was a huge success which has no doubt helped advance the readiness of the firms in attendance. I want to take the opportunity to thank Grant Mansfield and the team at BNY Securities Finance for their support in hosting the event.
Testing & Readiness: The 30% Challenge
As we move towards the next phase of the transition – implementation and testing, a recent survey from the EU T+1 Industry Committee showed that while engagement is high, only 30% of industry recommendations have been implemented to date. To bridge this gap, ISLA has produced a ‘menu-style’ guide of T+1 testing considerations to help firms coordinate cross-industry testing throughout 2026 and 2027. Additionally, the UK AST has launched a Readiness Register for firms to self-certify their compliance with these new standards.
For firms starting their journey, I highly recommend reading the ISLA Best Practice Handbook, joining the ISLA T+1 Working Group, and reviewing all the documents linked to in this post. Beyond that, I have been an advocate for a few key fundamental positions which should underpin all your firms’ T+1 readiness plans:
- Master Your Inventory: Move toward real-time tracking. In a T+1 world, knowing exactly where your securities are at any given time is imperative.
- Refine the Settlement Chain: Test your full trade lifecycle to eliminate friction. One weak link can derail the entire settlement process.
- Automate for Efficiency: Move beyond manual processes. Automation reduces operational risk, prevents costly penalties, and keeps overhead in check.
- Drive Counterparty Readiness: Your readiness is only as good as your slowest counterparty. Start those alignment conversations with clients and partners today.
Closing Thoughts
Looking ahead, ISLA will continue to work with its members, wider industry and partners to ensure the tools, knowledge and best practices are accessible and actionable as we move into this next phase. Following the success of the T+1 Roundtable, we will be hosting a special session at ISLA’s upcoming 33rd Annual Securities Finance & Collateral Management Conference in Lisbon, where we will hear from the ‘front line’, looking at how trading desks are adapting to new trade lifecycles. We will specifically examine the inadvertent impacts on cross-geographical securities lending, where time-zone gaps and FX settlement mismatches can create new pockets of fragmentation. I hope to see many of you there.
The transition to T+1 is a lifecycle-wide evolution, and ISLA is here to ensure the securities finance industry is ready for Day 1. Please do get in contact if you’d like any more information on any of the information shared above.
For a more detailed overview of the current roadmap and milestones, we have created a short two-pager available for free here.
Tony Holland
Director of Market Practice,
ISLA
