The European Union, UK and Switzerland are due to cut their securities settlement cycle by one day to the day following a trade, T+1, and there were warnings that firms that do not meet this standard are likely to go out of business.

Andrew Douglas, chair of the UK Accelerated Settlement Taskforce, which was set up by the government to make recommendations for the transition, spoke on a panel about T+1 at AFME’s Operations, Post-Trade, Technology & Innovation conference (OPTIC) conference in Amsterdam on 7 October 2025.

Andrew DouglasUK Accelerated Settlement Taskforce and Giovanni Sabatini EU T+1 Industry Committee join Gareth Jones @EuroclearGroup to assess T+1 progress across the EU, UK and Switzerland #OPTIC2025 pic.twitter.com/yCZFQbEFGW

— AFME (@AFME_EU) October 7, 2025

Douglas highlighted that laws are being put in place in the EU and the UK for the migration to T+1 to take place on 11 October 2027. He is most concerned about small asset managers, who are not members of trade bodies and do not attend events. For example, buy-side trade organisations have a total of 600 firms in the UK, but the FCA, the financial regulator, has authorised 2,500 asset managers. Douglas described not moving to T+1 on the reported date as a “classic case of self harm.”

“If you don’t adhere to this, there is a fairly good chance that you won’t survive in the future,” he added. “The recommendations, both in the UK and in the EU, is the plan that your peers in the industry have determined is the most likely route to success.”

In addition, if firms do not meet the October 2027 deadline they will not be in compliance with the law, so counterparties will probably not want to do business with them.

Giovanni Sabatini, independent chair of the EU T+1 Industry Committee, agreed. He said on the panel: “Firms will have to explain to their clients why they are not adhering to our recommendation. They will lose clients, lose liquidity, and will potentially be out of the business.”

Douglas also warned that firms who have already moved to T+1 in the U.S. should not be complacent about the transition in the EU and UK as the two processes are different. The U.S. and Canada moved to T+1 May 2024.

For example, the U.S market uses affirmations but the EU and the UK do not. In the U.S only the broker has to ensure that settlement occurs on T+1, while it is a dual obligation in the EU and the UK. The latter extensively use partial settlements, which is not a major feature in the US market.

“I would be very happy for you if you go through the work and conclude there is nothing more for you to do, but don’t make that assumption,” said Douglas. “I’d also be very surprised if you concluded there was nothing for you to do.”

Sabatini highlighted that the move to T+1 in the EU is more complex than in the U.S. or UK as it is not moving a single market. The EU transition involves 27 jurisdictions, 31 central securities depositories (CSDs) and multiple clearinghouses.

However, Sabatini gave reasons for why he is optimistic. The move to T+1 will be mandatory once legislation is approved and the regulatory technical standards from ESMA are likely to be aligned to the taskforce’s recommendation.

“One of the most relevant things is peer pressure as T+1 is a business opportunity,” Sabatini added. “If you are not ready to adapt to T+1 by improving your IT system, moving to full automation and straight  processing, you will be out of the business.”

T0, or same day settlement

The UK Accelerated Settlement Taskforce allowed all the different constituencies in the industry to come together to create recommendations and adopt a solution to a common problem and Davies said the UK authorities “quite like this model.” It can be replicated in other areas such as cutting the settlement even further to the same day as the trade, T0, or the future of the City of London.

‘Those of you in the UK will know that I have started calling it a T0 or Digitalization Task Force,” he added. “It’s in very early days but it seems to be working.”