Settlement of securities trades is set to be made faster in a bid to make the UK’s capital markets more competitive. 

The change means that a typical securities trade, such as buying and selling shares, would be settled the day after it is agreed – instead of the current two-day standard.

The UK Government said that faster settlement would bring the UK into line with key international markets such as the US and reduce costs for investors by limiting risks when making trades.

The move was announced after representatives from JP Morgan, Blackrock, Abrdn, Morgan Stanley, Goldman Sachs, Citi, Fidelity, and Schroders met Chancellor Rachel Reeves as part of ongoing engagement with industry to hone the Financial Services Growth and Competitiveness Strategy – one of the eight key growth sectors identified in the Modern Industrial Strategy.

The Chancellor said the UK Government had accepted all recommendations made by the Accelerated Settlement Technical Group – confirming that the UK will move to a ‘T+1’ standard for settling securities trades from 11 October 2027.

Chief Executive Officer of the Financial Conduct Authority Nikhil Rathi said:

“We highlighted how the move to T+1 will make our markets more efficient and support growth in our recent letter to the Prime Minister. We will support industry as they move to T+1 and expect firms to engage and plan early.”

Governor of the Bank of England Andrew Bailey said:

“Shortening the UK securities settlement cycle to T+1 will bring important financial stability benefits from reduced counterparty credit risk in financial markets. It is important that firms and settlement infrastructures have robust plans for an orderly transition in October 2027. As part of this effort, the Bank looks forward to continuing dialogue with regulators in other markets which are pursuing similar changes.”

The Accelerated Settlement Technical Group has created a detailed implementation plan to ensure a smooth transition to T+1. The UK Government confirmed that it will bring forward legislation to implement the change, including setting the date to move to the new standard.

Terms of Reference have been published for the next phase of the project, which will continue to be led by the industry taskforce with Andrew Douglas as chair and HMT, the FCA and the Bank as observers. Industry chairs from the EU and Switzerland have also been invited to observe the UK industry taskforce to encourage alignment across Europe.

The taskforce will oversee and manage implementation of the recommendations up until T+1 is successfully implemented, and for a short period afterwards to evaluate the short-term impacts.