The UK government has launched the Accelerated Settlement Taskforce to explore the potential for faster settlement of financial trades.
It will be led by Charlie Geffen, former senior partner at law firm Ashurst and current senior adviser at consultancy Flint Global.
The first objective of the taskforce will be to assess how a T+1 or T+0 settlement cycle could be beneficial to the UK, taking into account the challenges that this transition could present.
It will also offer short and medium term solutions to UK firms that must adjust to other jurisdictions’ accelerated settlement cycles.
In addition, the performance of the UK’s current settlement structure will also be evaluated for any improvements and reforms that may be necessary to facilitate the shift.
The settlement period has shortened in recent decades in line with the advancements of modern technology.
The most common standard currently 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.
However, the US and Canada intend to move to T+1 by 2024, while India has already begun a gradual rollout of T+1 in the share trading market.
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.
