UK government explores T+1 settlement potential with new taskforce
09 December 2022 UK
Image: Coloures-Pic/stock.adobe.com
The Accelerated Settlement Taskforce has been launched by the UK Government to explore the potential for faster settlement of financial trades.
Chancellor of Exchequer Jeremy Hunt formed the taskforce, which will be led by Charlie Geffen, former senior partner at law firm Ashurst and current senior adviser at consultancy Flint Global.
The industry taskforce will examine the case for trades to be settled more quickly in the UK, such as moving to a T+1 standard settlement period.
The settlement period has shortened in recent decades in line with the capabilities of modern technology. The most common standard at present is T+2 — which requires most trades to be settled two days after the trade date, with some exceptions.
T+2 has been in place for the UK and the European Union since 2014, with the US transitioning to T+2 in 2017.
The US and Canada intend to move to T+1 by 2024, which would require most trades to settle the day after the trade date. India has already begun a gradual rollout of T+1 in the share trading market.
As the UK Government considers moving to T+1, it lays out four key objectives for the taskforce to undertake during its work.
The taskforce will explore the case for moving to an accelerated settlement cycle in the UK and outline how this could be implemented. It will evaluate current settlement performance across the UK sector, as well as assess potential improvements and reforms.
Furthermore, the taskforce aims to engage with the wider financial services sector while undertaking this work and will provide recommendations, including how any changes should be implemented by industry, regulators and government, and what the appropriate timetable should be.
The taskforce will publish its initial findings by December 2023, with a full report and recommendations made by December 2024.
Chancellor of Exchequer Jeremy Hunt formed the taskforce, which will be led by Charlie Geffen, former senior partner at law firm Ashurst and current senior adviser at consultancy Flint Global.
The industry taskforce will examine the case for trades to be settled more quickly in the UK, such as moving to a T+1 standard settlement period.
The settlement period has shortened in recent decades in line with the capabilities of modern technology. The most common standard at present is T+2 — which requires most trades to be settled two days after the trade date, with some exceptions.
T+2 has been in place for the UK and the European Union since 2014, with the US transitioning to T+2 in 2017.
The US and Canada intend to move to T+1 by 2024, which would require most trades to settle the day after the trade date. India has already begun a gradual rollout of T+1 in the share trading market.
As the UK Government considers moving to T+1, it lays out four key objectives for the taskforce to undertake during its work.
The taskforce will explore the case for moving to an accelerated settlement cycle in the UK and outline how this could be implemented. It will evaluate current settlement performance across the UK sector, as well as assess potential improvements and reforms.
Furthermore, the taskforce aims to engage with the wider financial services sector while undertaking this work and will provide recommendations, including how any changes should be implemented by industry, regulators and government, and what the appropriate timetable should be.
The taskforce will publish its initial findings by December 2023, with a full report and recommendations made by December 2024.
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