The UK government published a draft Statutory Instrument (SI) and related policy note, to make T+1 the standard settlement cycle in the UK from 11 October 2027.
Among the amendments, the SI introduces an exemption for securities financing transactions (SFTs), as recommended by the Accelerated Settlement Taskforce.
“The government agrees that it is important that SFTs are exempt from the T+1 requirement so that they can be used flexibly by firms to support their liquidity management and funding requirements,” according to a statement.
The SI specifies that the following types of SFTs are exempt:
- Securities or commodities lending
- Securities or commodities borrowing
- Buy-sell back transactions
- Sell-buy back transactions
- Repurchase transactions