The Accelerated Settlement Taskforce (AST) Technical Group have just published their UK Implementation Plan for the first day of trading for T+1 settlement – 11th October 2027.
The full report is available here.
Following the Accelerated Settlement Taskforce’s recommendation to move to a T+1 settlement cycle, and the subsequent work of the Technical Group chaired by Andrew Douglas, a comprehensive implementation plan has been released. This report outlines 12 critical and 26 highly recommended actions to ensure a smooth transition, proposing a target date of 11 October 2027 for the UK to adopt T+1.
ISLA’s Director of Market Practice Tony Holland has been a key contributor in the T+1 Technical Group and has provided his key takeaways from the report:
- UK T+1 Implementation Date: Recommends starting UK cash securities trading for T+1 settlement on 11th October 2027.
- UK T+1 Code of Conduct (UK-TCC): Defines the UK-TCC, including scope, timetable, and expected behaviours for market participants to meet T+1 obligations.
- Critical Actions: Identifies twelve critical actions in four business areas for T+1 implementation.
- SFT 01: Automation of Stock Lending Recalls: Lending intermediaries and borrowers should automate recalls processing using electronic messaging with standardized data.
- SFT 02: Market Cut-off for Stock Lending Recalls: Market participants should follow best practices for recall cut-off times and return deadlines, aligned with the close of trading on the LSE.
- Additional Recommended Actions: UK-TCC also identifies twenty-six highly recommended actions in six business areas for compliance.
- SFT 03: Stock Lending Engagement: Regular reviews of the UK stock lending market to assess potential changes to UK-TCC recommended actions.
- SFT 04: Post-Execution Order Instructions: Buy-side participants should notify lending intermediaries of sales promptly to expedite recalls within the specified cut-off time.
- Expected Behaviours: Defines five expected behaviours for market participants, including commitments to compliance, automation, and prompt action.
- SFT Importance: SFTs are crucial for market operations, providing funding, inventory management, and liquidity. They require flexibility in settlement cycles.
- SFT Settlement Flexibility: Most SFTs will move to T+0 or T+1, but some will have later settlement dates. Restricting this flexibility could drive activity away from UK venues.
- SFT Exemption Recommendation: Recommends explicitly exempting SFTs from T+1 settlement to provide clarity and legal certainty.
