The T+1 implementation date, set for 11 October 2027, is quickly approaching. Financial firms are actively gearing up for this significant shift. However, the question remains – are they ready for the T+1 transition in the UK and Europe?
In a recent discussion, Jamie Bell, the acting head of capital markets for the Financial Conduct Authority (FCA), and Richard Monks from EY, provided insights on the FCA’s expectations and plans. Bell shared the FCA’s viewpoint on the upcoming switch during the Accelerated Settlement Taskforce session.
The FCA views the T+1 transition as a significant leap for the financial sector. It promises a more efficient service for firms by shortening the settlement period from two days to one. This adjustment is likely to boost the overall efficiency of the financial market, reduce risk, and liberate capital for other uses.
Is the financial sector prepared?
Despite its benefits, the switch to T+1 presents challenges. It demands careful planning and execution from firms. The FCA has been actively conveying its expectations and plans. Nevertheless, each firm bears the responsibility to confirm their readiness for the transition.
Firms need to take the lead in preparing for the T+1 shift. They must assess the effects on their operations, clients, and market activities. A detailed examination of their operational processes and systems is crucial to adapt to the reduced settlement period.
The readiness of firms for the T+1 transition remains a question. As the implementation date nears, the need for firms to be prepared intensifies. It may be a formidable task, but with thorough planning and preparation, firms can successfully navigate the transition.
