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T+1 Settlement: Settling trades in just a day

Understand the impact and challenges of T+1, and how Xceptor helps firms achieve settlement efficiency and reduce operational and counterparty risk.

What is T+1 Settlement?   

The T+1 Settlement is an update to the existing settlement timeline driven by the Securities and Exchange Commission (SEC) and the Financial Conduct Authority (FCA) which requires the processing of settling a trade to be done one business day after the transaction date. This means securities bought or sold must be delivered and paid for within a day – a significant shift from the previous T + 2 settlement.  

T+1 Settlement has been implemented across the US, Canada, and Mexico since March 28, 2024, and is set to come into force across the EU, UK, and Switzerland by the deadline of October 11, 2027.  

Why is T+1 Settlement being implemented?  

T+1 Settlement has been implemented in parts of the world, and will continue to do so, as the next step towards quicker settlement times.  

The change from two to one day settlement times is designed to:  

  • purple-arrow Improve market efficiency by shortening the settlement cycle, lowering counterparty risk, and freeing up capital sooner for reinvestment.
  • purple-arrow Reduce risk shortening the number of days between trade execution and settlement will reduce counterparty, market, and credit risk, especially during periods of high market volatility. 
  • purple-arrow Provide investors with quicker access to funds or securities.  
  • purple-arrow Align global settlement standards to simplify settlements with a seamless process. 

What does T+1 Settlement apply to? 

T+1 Settlement will apply to most securities transactions, including – but not limited to: 
 

Stocks

Bonds 

Exchange-Traded Funds (ETFs)

Derivatives and cross border trades subject to local regulations

How T+1 Settlement works  

Under the updated settlement timeframe, all trades must be settled within a day of the transaction date. For example, if a trade is executed on a Monday, then securities must be sold and funds transferred to the buyer by the Tuesday.  

 

 

 

 

Who does T+1 Settlement affect? 

The introduction of T+1 Settlement will (or already has for the US, Canada, and Mexico) impact all market participants operating in the EU, Switzerland and UK markets, including – but not limited to:  

  • Asset Managers 
  • Brokers & Dealers  
  • Exchange & Clearing Houses  
  • Fund Managers  
  • Investors 

Let’s talk about your T+1 strategy

Get in touch with our team to learn how Xceptor eases the T+1 Settlement changes through our data automation platform, prepares existing clients for the deadline, and how we can help you do the same.   

 

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Xceptor in action: client success stories

Our clients leverage our solutions for T+1 readiness, transforming their data management and regulatory compliance processes.
Associate Director Head of Reconciliations

Xceptor has helped to shift the time and effort that my team used to spend on manual work to other less mundane and higher-value activities.

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