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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:
1. 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.