This shift would align settlement processes for UK-based financial institutions with those mandated in the US , which adopted T+1 in 2024, and with similar changes currently in development across the EU.
This shorter timeframe would require that the post-trade steps associated with settlement – that is, trade affirmation, allocation, confirmation, funding and reconciliation – be completed within 24 hours following execution, thus incentivising automation and reducing the risks associated with manual error.
Although the deadline may seem distant, accelerated settlement represents a fundamental shift. For financial institutions, it is not simply a compliance exercise, but rather a strategic change that will impact technology, operations and client servicing, with risk management high on the agenda too.
Read more about T+1 Accelerated Settlement
Learn more about the Edinburgh Reforms
Why the move to T+1 is happening
There are three drivers behind the move to accelerated settlement:
- An effort to reduce default risk. Shorter settlement cycles reduce credit risk by limiting the period in which a trade remains unsettled. This became particularly evident during periods of extreme market volatility, where settlement risk can unfold quickly. Learn more about counterparty risk here
- Global alignment. With the US already operating a T+1 regime and the EU working toward the same 2027 target, maintaining a longer settlement cycle in the UK would increase complexity and operational friction. Aligning with other markets supports competitiveness and international investment flows.
- Modernisation. Accelerated settlement forces firms to address operational inefficiencies, review their legacy technology systems and adapt manual processes that are no longer fit for purpose. The updated process means organisations that are slow to implement digital transformation risk falling behind and may need to reconsider future proofing their post-trade operations.
The operational impact on financial Institutions
The shift to T+1 will require coordinated change across all areas of a trading business.
From a technology perspective, firms must ensure that at-trade, post-trade and settlement systems can support real-time transactions processing. Manual workflows will struggle to operate within a one day window, so automation is an essential consideration. Improved data quality is also crucial to maintaining accuracy.
Operational workflows will also require redesign. For example, activities such as trade allocation and confirmation must be planned for the date on which an asset or instrument trades rather than the following day, which carries with it implications for operating hours, staffing models and coordination with counterparties.
Accelerated settlement forces firms to address operational inefficiencies, review their legacy technology systems and adapt manual processes that are no longer fit for purpose.
From a risk and controls standpoint, T+1 settlement means UK-based firms would have less time to detect and resolve errors, and they will need enhanced monitoring and more resilient operational strategies as a result. Any technological or procedural breakdown will have a more immediate impact on settlement outcomes.
Technology as a critical enabler
The UK Accelerated Settlement Taskforce and other regulators have emphasised the need for technology readiness as it will be a decisive factor successfully transitioning from T+2 to T+1.
Firms must assess whether current systems can support faster trade execution, increased automation, better data collection and management, and greater communication with third-party brokerage platforms.
For many organisations, this means targeted modernisation to keep costs down and systems running. emagine expects to see an increase in demand for consultancy services to ensure organisations are in the right place in terms of the digital transformation this level of modernisation entails.
Strategic actions to prioritise
Although T+1 will likely not be mandated until 2027, the preparation window is already narrowing.
Financial institutions should be prioritising several key actions in the coming months:
- They must establish cross-functional governance. Accelerated settlement touches IT, operations, risk, compliance and the trading business, so defined ownership and strategic decision-making are essential.
- They must conduct an in-depth assessment of current systems. Mapping current post-trade processes against T+1 requirements will highlight where timelines, dependencies and controls must be adapted. They will also need to engage early with vendors and counterparties. Readiness will depend on internal capabilities as well as on the preparedness of market participants, brokerage venues and technology providers.
- They must embed T+1 into wider digital transformation programmes such as those focused on broader use of the Cloud, data, automation or operating model change.
Accelerated settlement is set to become a regulatory obligation, but it also presents an opportunity to strengthen operational resilience, reduce risk and improve digital efficiency. Financial services firms that take a proactive, strategic approach and treat T+1 as a business and technology transformation opportunity rather than a last-minute compliance exercise will be best placed to adapt to faster post-trade mandates.