T+1 Settlement in Europe: A Fork in the Road
Finadium
March 2025
Following the successful North American move to a T+1 settlement cycle in May 2024, Europe and the UK are set to follow in October 2027. While the go-live went smoothly in North America, implementation in Europe looks more difficult given the fragmentation and complexity of infrastructure. The compressed settlement timeline will create pressure on front-to-back workflows for banks, custodians and their clients.
Europe’s T+1 presents an opportunity for capital markets participants to modernize their infrastructure and operations at scale. This is a fork in the road: firms may respond to T+1 by hiring more people, outsourcing, and leveraging existing vendors to manage faster processing times. Or they may take a broader perspective on infrastructure and operations and be ready for a newly automated global market environment, encompassing distributed ledger technology (DLT), generative artificial intelligence (GenAI) and cloud services, among other innovations. We expect a new generation of winners and losers to emerge in capital markets as a result.
This report provides practical guidance on what firms should prioritize to reduce the cost and complexity of the move to T+1, while maximizing the once-in-a-generation opportunity to modernize post-trade processes and technology. The report also considers lessons from North America’s T+1 implementation opportunities taken and missed to re-engineer and automate the business.
This report has been written to support asset managers and owners, banks, custodians and infrastructure providers with their strategic planning and creation of action items for Europe’s T+1 transition.
Table of Contents
- Executive Summary
- The Impact of T+1 in Europe and the UK
- Lessons Learned from North America
- Choosing a New Operating Model
- – Eight Operational Changes for European T+1
- A Practical Roadmap: What Firms Should Prioritize
- The Case for Infrastructure Modernization
- – T+0 or Not, Modernization Makes Senses
- – Seven Things Firms Should Do Now
- Appendix: Key Differences in the Europe and the UK Implementations
- About Finadium LLC