The T+1 technical group (TGT) of the UK Accelerated Settlement taskforce (AST) has published its proposed recommendations for a transition to T+1 in the UK, calling for market participants to review and provide feedback.
The report outlines 43 ‘principal recommendations’, covering critical post-trade activities that firms must be able to complete efficiently in a T+1 environment. They cover the areas of success criteria, settlement, FMIs, static data, corporate actions, securities financing and FX.
There is also 14 ‘additional recommendations’, which assess environmental issues that need to be addressed if the UK is to maximise the efficiency gains that T+1 could deliver – but are not essential to successful implementation.
The TBT stresses the need for automation ahead of the implementation process, urging market participants to begin automating as soon as possible, or begin working with outsourcing partners to digitise their processes.
The report stated: “To prepare adequately, the market requires clarity and certainty. Clarity about what needs to be done at the level of the individual market participant and certainty about when it needs to be done. This document aims to address the former, whilst our final report at year end will provide the latter in the form of implementation dates per recommendation, typically no later than the end of 2025, 2026 or up to the actual transition date in 2027.”
Andrew Douglas, chair of the T+1 Technical Group, said: “This interim report is a key milestone in the UK’s journey to T+1 settlement and I’d like to extend my gratitude to all those involved in crafting this report and providing the depth of industry expertise needed to shape these draft recommendations.
“As an independent, inclusive working group, supported by the public authorities, I’m calling on all market participants to engage in this consultation so that together we can ensure the final recommendations for implementation reflect the full spectrum of industry needs.”
The draft recommendations will be open for consultation with all participants in the UK equity market until 31 October 2024.
Once finalised in December, the report states that it is expected that “the recommendations, and their compliance, will be treated as a Post-trade Code of Conduct setting expectations of behaviour of all UK market participants and as such, could be used for supervisory purposes”.
A full copy of the report can be found here.