As we bid farewell to 2024, we are left with many questions about the dawn of 2025, a year that promises to be a game-changer. We already have key milestones within the ever-fluid EMEA regulatory landscape, including DORA and implementing the Mifid II and Mifir review. We will likely witness further regulatory divergence between the UK and the EU. Still, all parties must act swiftly to address the macro-level challenges affecting primary market listings and the lack of investment in the EMEA region. It is imperative that action is taken on all fronts. 

We should finally see, on a grander scale, AI usage moving from an over-used buzzword bingo to a reality. The pursuit of innovation will persist, with new entrants needing to demonstrate credible and distinctive credentials in a highly competitive and demanding environment, where only those that offer something unique will ultimately endure.

As the industry moves towards a consolidated tape and the looming T+1 deadline, established players will likely continue positioning themselves to expand their market share or protect their existing trading, data, and technology businesses. This is set against a backdrop of rising industry costs, which will inevitably face heightened scrutiny.  Liquidity sweet spots like retail, blocks, bilateral and VWAP crossing will again dominate many liquidity discussions. The bilateral debate will likely persist, and we can expect engaging discussions from industry participants and regulators. 

Furthermore, the ‘Trump effect’ looms on the horizon; this could exacerbate market volatility in the year ahead, a reality that will soon become apparent. In 2025, we must challenge existing workflows and the status quo to innovate and compete globally. We all have a role to play in establishing the EMEA ecosystem as a model of excellence for the global trading community next year and beyond.

Steve Walsh, director of product and solutions, Duco 

This has been one of the most consequential years for financial market regulation in a decade. New compliance requirements have reshaped frameworks in Europe and across the globe. The two most important regulations were the Emir refit at the end of April and the US transition to a T+1 settlement cycle. Both regulations aim to enhance transparency and resilience. 

The Emir refit’s primary motivation was to improve data quality and transparency in the European derivative markets with mandatory data reconciliation requirements and obligations to report material issues to national competent authorities (NCAs). While the transition was largely successful, regulators next year will need to address lingering issues around data accuracy and integrity on data reported to trade repositories. 

Meanwhile in America, T+1 has created operational difficulties, highlighting data quality and transformation issues as well as poor processes and a lack of automation throughout. Resolving these issues will be relevant in Europe as well, as T+1 is expected to reach both the EU and the UK by the end of 2027. European firms need to start preparing while learning from their US peers.

Vikesh Patel, global head of clearing, and president, Cboe Clear Europe 

In 2025, we anticipate renewed regulatory efforts to promote more resilient, efficient and integrated pan-European financial infrastructures. Striking the right balance between fostering growth and innovation on one hand and maintaining regulatory oversight and financial stability on the other will be essential for advancing the region’s capital markets and we look forward to Emir 3.0 helping bring this to life. Whilst we anticipate that talk of top-down consolidation for Europe’s post-trade infrastructure is likely to persist, we will continue to advocate for strengthening the existing competitive framework, particularly in cash equities through mandating true clearing interoperability for all major exchanges.

We remain dedicated to fostering a stronger and more resilient European market by continually driving innovation and equipping participants with the tools they need to drive a more efficient use of their capital, ultimately contributing to long-term growth and stability across the region.

Matt Smith, chief executive officer, SteelEye  

Following several years marked by significant fines for record-keeping breaches related to encrypted messaging apps, we expect to see a broadening focus in 2025. E-comms will remain a regulatory focus, but so too will areas such as voice surveillance. 

Voice surveillance currently represents a big gap in many firms’ communications surveillance programmes due to ambiguous regulatory rules. However, it is likely regulators will clarify expectations around voice surveillance in 2025, and financial firms should prepare for this. 

Currently, regulatory rules do not specify how voice data should be monitored which has resulted in many financial institutions simply carrying out manual reviews of a sample of voice calls, leaving a considerable gap for missed risks.  With advancements in transcription and analytics technology, voice surveillance will move from being an overlooked channel to a critical component of risk management frameworks in 2025. 

Simon Gallagher, chief executive officer, Euronext London 

In 2025, the realities of increased competition from the US for capital and liquidity will be a wake-up call for Europe. On both sides of the channel, policy makers will accelerate measures to bridge the gap between the region’s vast, untapped household savings and its equity markets.

As part of this wider effort, Europe will need stronger and simpler market structures. Euronext will play its full role, making material contributions to simplifying Europe’s post-trade complexity, harmonising its fragmented ETF markets and leveraging our new clearing capability to unlock value for clients. In addition, following our recent push for a single, unified European prospectus, we will continue to proactively propose ‘bottom-up’ solutions to simplify European markets.

Under strong political leadership, I am optimistic that the region will be able to catch up with the US in funding innovation and infrastructure and in creating greater wealth for its citizens. 

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For trading desks, the new rules will result in a range of operational and regulatory shifts. Clearing obligations will become stricter, with enhanced oversight of margin requirements and risk management processes. 

Despite these new potentially arduous compliance pressures, trading desks are also likely to benefit from reduced counterparty risk and improved market confidence thanks to the changes. Day-to-day trading activities, liquidity, and risk management on fixed income desks are all things that could be impacted by these new rule changes. As with any regulatory change or evolution, industry participants will need to adapt their strategies and systems to navigate the shifting fixed income landscape.

“As numerous policymakers, academics, and market participants have recognised, greater central clearing of US Treasury transactions would improve the safety, soundness, and efficiency of the US Treasury market, promote competition, enhance transparency, and facilitate all-to-all trading,” notes Laura Klimpel, managing director, head of fixed income and financing solutions at The Depository Trust and Clearing Corporation (DTCC).  

“Increased central clearing can also reduce clearing costs and credit risk by incentivising direct participants to submit more balanced portfolios that have a lower risk profile and thus carry lower clearing fund and liquidity facility requirements.”

In addition, with the introduction of balance sheet netting and favourable regulatory capital treatment, central clearing could result in an increase of dealers’ capacity to transact and potentially improve some market liquidity constraints.

The SEC’s new rule changes are primarily aimed at improving market stability and minimising systemic risks. They aim to strengthen the security of the US Treasury market by requiring central clearing for eligible instruments such as repos, reverse repos, inter-dealer broker transactions, and other cash transactions. The objective of these rules is to reduce counterparty risk, curb contagion, and enhance market transparency.

“The lessons learnt from past financial stress conditions and crises, particularly those involving non-bank market participants, have driven these changes. One counterparty defaulting could pass risk on to another party, this in turn could have a cascading effect on liquidity across the market,” highlights Edoardo Pacenti, head of trading tools for fixed income at ION. 

“In addition, currently, the Fixed Income Clearing Corporation (FICC) is indirectly exposed if one of its members makes a trade with a non-member and subsequently defaults on the transaction. With these changes, there will be a dramatic increase in the amount of daily US Treasury clearing activity processed through the FICC.”

As it currently stands, two compliance dates exist which firms should be most conscious of. If no extensions are actioned, 31 December 2025 marks the beginning of the mandate for cash transactions, while on 30 June 2026 the repo transaction mandate will commence. 

Institutions should also note that the SEC has implemented a regulatory change to redefine the term ‘dealer,’ aimed at increasing oversight of proprietary trading firms (PTFs), which are key liquidity providers in the US Treasury market. 

PTFs, which trade using their own capital rather than on behalf of clients, will now be required to register as dealers with both the SEC and FINRA. Alternatively, if PTFs prefer not to register as dealers, they must set up a sponsored member arrangement.

“While this is a significant change for PTFs, they already have experience delivering similar large-scale projects following the change to the T+1 settlement in May 2024 which can be applied to the upcoming dealer redefinition and central clearing changes,” adds Pacenti. 

Another key consideration for institutions is the increase in clearing volume that will occur as a result of these rule changes. 

“Our understanding is that seven trillion or so is the daily average volume that is traded in these markets. Based on our engagement with market participants, we’re expecting that it’s going to be an increase in demand for capital – maybe a 20-30% increase,” notes Kevin Khokhar, head of investment funding at T. Rowe Price. “Firms will have to look at the infrastructure, systems and processes, to see if they can absorb this large market structure regulatory change.”

Khokhar continues to highlight that margin and portfolio funding impact should be another key focus for institutions as they adapt to these rules. When considering bilateral transactions, which typically occur in the treasury trading space, when shifting into a cleared model, there will be increased rules and regulations around the type of assets you can pose for margining, to optimise and normalise FI trading books.

“Being able to understand the impact of your liquidity profile in your trading portfolios will be one of the key factors, something that the market needs to consider as you get into clearing market structures,” he adds. 

Competition

The new fixed income clearing rules could potentially have a significant impact on competition in the bond markets, particularly for new entrants. By mandating central clearing for a wider range of transactions and increasing oversight on market participants, the new rules could raise the operational and compliance costs for smaller firms and new market entrants. Despite this potentially leading to barriers to entry, it could also enable a more level playing field by reducing counterparty risk and increasing transparency. 

“Transparency is always good for competition, right? It narrows bid ask spreads. It makes things easier to trade and encourages more to be involved because there’s more information,” notes Brian Rubin, head of US fixed income trading at T. Rowe Price. 

“The new rules should make markets more liquid. We’re always looking for greater transparency.”

Established firms, which have more robust infrastructure and regulatory expertise, may find it easier to adapt to these changes, while newer players will need to navigate increased regulatory expectations to compete effectively.

The new rules also have the potential to shift the ways in which transparency exists within the fixed income landscape. Particularly, with a shift from transparency solely being held by broker dealers, to the buy-side. 

“As you move from more of a bilateral transaction-based market to more of a cleared based model, market participants including buy-side participants will potentially see more transparency into what the transactions levels look like, what overall trading volume trends are, and also some of the post-trade aspects that impact FI Treasury and repo markets,” emphasises Khokhar. “That gives market end users more transparency on the buy-side to see what potentially may be happening from the dealer/broker community.”

Impacts on trading

Central clearing is expected to alleviate counterparty credit limits through improved risk management and transparency offered by central counterparties (CCPs) and shift previously uncollateralised bilateral agreements to CCPs. This transition should notably reduce the risks of counterparty defaults and fire sales.

“This could improve market liquidity by removing existing trading restrictions and mitigating counterparty and bilateral trading risk. This will be particularly beneficial in times of stress, as these factors will ensure that dealers don’t withdraw liquidity,” notes Pacenti.

“At the same time, the cost of central clearing and risk management activities will likely increase the overall costs of transactions for participants who don’t currently centrally clear transactions. These costs will be passed on from FICC members to non-FICC members.”

Likewise, highly leveraged or low-margin trading strategies, such as basis and relative value trades, may become less viable due to these proposals. As a result, fewer PTFs may engage in these trades, causing a decline in liquidity for the underlying asset classes, like US Treasury actives. This could offset some of the anticipated benefits of the new rules.

Anticipating the changes 

DTCC’s Klimpel tells The TRADE that as a covered clearing agency, FICC has been taking the necessary steps under the SEC rule requirements to prepare for this significant market structure initiative. 

“FICC offers a variety of both direct and indirect membership models for buy- and sell-side market participants. As we prepare for the upcoming mandate, FICC continues to work with the industry to educate firms, assess offerings, and ensure readiness,” she states.  

“Our guidance to market participants is to begin preparations now by evaluating direct and indirect access models to determine the best approach for their organisations and clients to achieve successful implementation by the SEC compliance dates.”

Another strategy being developed in response to these changes is increased investment in technology, primarily to offset the costs of central clearing. This involves investing in scalable transaction reporting systems, which reduce reliance on manual processes, lower the risk of errors, and decrease the marginal cost of each transaction.

“Overall, investing in technology will make it more economical for firms to comply with the new rule changes,” adds Pacenti. 

With rule changes such as these, the impacts will be felt across institutions, spanning across different areas of their operational structure. Having open and more transparent communication among the different strands of a business will have a positive impact on efforts to make compliance successful.

“We have to understand the impact from a fixed income trading perspective, but also post-trade services and capabilities. We need to assess the impact to operations, risk, and other business units as well as our external providers for sourcing portfolio liquidity,” argues Khokhar. 

“Another aspect is having operational strategies, where market participants should implement a governance structure across all potential impacted business units to fully understand the impact to your front-to-back trading platform.” 

Despite some hopes that the implementation of these fixed income clearing rules will be delayed, institutions should act as though the set dates are expected to go ahead as planned to ensure adequate adjustments are made to ensure successful compliance. Clearing obligations will undoubtedly become more prominent, requiring an increase in viewpoints of margin requirements and risk management processes. As with any key regulatory change, the sooner institutions can prepare, the better the outcome will be for the industry at large. 

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Speaking in an announcement on social media platform Truth Social, incoming President Donald Trump said: “Paul is a proven leader for common sense regulations. He believes in the promise of robust, innovative capital markets that are responsive to the needs of investors and that provide capital to make our economy the best in the world. 

Paul Atkins, Gary Gensler

“He also recognises that digital assets and other innovations are crucial to making America greater than ever before […] A former SEC Commissioner from 2002-2008, Paul strongly advocated for transparency and protecting investors.”

Atkins was initially appointed by President George W. Bush as a commissioner of the SEC in July 29 2002, where he served until August 2008. 

His appointment follows the announcement of Gensler’s official departure – set for 20 January 2025.

Gensler joined the SEC in April 2021 following the GameStop crisis, appointed by President Joe Biden.

Prior to this, on 14 November, Gensler appeared to suggest a departure from the commission through a thinly veiled farewell message during his ‘Car Keys, Football, and Effective Administration’ speech for the Practicing Law Institute’s 56th Annual Institute on Securities Regulation.

Read more: Gensler alludes to departure from SEC

Speaking in the official announcement, Gensler said that it had been “the honour of a lifetime to serve with [SEC staff] on behalf of everyday Americans and ensure that our capital markets remain the best in the world”. 

He added: “I thank President Biden for entrusting me with this incredible responsibility. The SEC has met our mission and enforced the law without fear or favour. I’ve greatly enjoyed working with my fellow Commissioners, Allison Herren Lee, Elad Roisman, Hester Peirce, Caroline Crenshaw, Mark Uyeda, and Jaime Lizárraga. I also thank Congress, my colleagues across the US government, and fellow regulators around the world.”

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24X made its registration application to the US Securities and Exchange Commission to (SEC) to launch the first every 24-hour exchange for equities on 6 February 2024, following an unsuccessful application in 2023. 

24X’s proposal sought to “significantly expand trading outside of regular trading hours” for NMS stocks. Specifically, the national securities exchange’s initial plan was to operate every day of the year (all 365 including holidays), 23 hours a day – subject to certain pauses. 

Following this announcement, the launch is initially set for regular trading times, with after-hours trading from Sunday to Thursday to come once the set-up is complete. 

“[…] the Commission shall by order grant an application for registration as a national securities exchange if the Commission finds, among other things, that the proposed exchange is so organised and has the capacity to carry out the purposes of the Exchange Act and can comply, and can enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act,” said the SEC in its official report.

Specifically, the SEC highlighted several factors which must be ensured, including that 24X guarantees fair representation of the exchange’s members when it comes to its directors – namely that one or more directors representative of investors and not associated with the exchange, or with a broker or dealer.

Across the industry, desire for after-hours trading is on the up as barriers to entry continue to lower with this latest decision by the SEC by no means minor. 

The New York Stock Exchange (NYSE) is also planning to extend its weekday trading on its NYSE Arca Equities Exchange to 22 hours a day it announced back in October. 

The exchange confirmed it was filing updated rules with the SEC for the extended trading, with clearing to continue via the Depository Trust & Clearing Corporation (DTCC) which has also recently announced plans to extend operational hours.

This approval of 24X is set to have significant effects on the region’s market structure, as well as the potential for other securities exchanges to follow suit in light of the SEC’s decision.

Speaking to The TRADE, Sylvain Thieullent, chief executive at Horizon Trading Solutions highlighted that the transition to round-the-clock trading presents a wealth of opportunities, but also complexities.

“As evidenced by this ruling from the SEC, stock exchanges, traditionally confined by time zones, could now find themselves playing catch-up in a world where trading knows no bounds […] Trading in the dead of night requires the need to navigate potentially volatile markets with precision and extreme quickness. Outside of regular trading hours, liquidity tends to be thinner.

“Thin liquidity can result in wider bid-ask spreads and increased price slippage, making it more challenging for high-speed traders to execute trades at desired prices. Only algos capable of analysing vast volumes of data, detecting patterns, and executing trades with split-second precision will separate the winners from the losers. With regulators scrutinising every move, ensuring the integrity and reliability of these algorithms will be key.”

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In relation to segregated accounts and margin, FICC’s proposed rule changes seek to address the Commission’s new requirements and the conditions for including margin in the broker-dealer reserve formulas.

The proposed rule change would provide for the separate and independent calculation, collection, and holding of margin for proprietary transactions of a netting member from margin submitted to FICC by a netting member to support the transactions of an indirect participant.

In addition, the rule change would establish segregated accounts for direct and indirect participants, including establishing a minimum $1 million cash margin requirement for each segregated indirect participant.

Elsewhere, the rule change seeks to consolidate the methodology for calculating the margin requirements.

Meanwhile, in relation to access models, FICC proposes to re-name, consolidate, and adopt additional provisions governing GSD’s existing correspondent clearing/prime broker services.

As part of the proposals, moving forward, the correspondent clearing/prime broker services would be referred to as the “Agent Clearing Service,” submitting members would be referred to as “Agent Clearing Members,” and executing firms would be referred to as “Executing Firm Customers.”

In a filing, FICC stated that it designed the proposed changes to the Agent Clearing Service to highlight the similarities between the Agent Clearing Service and other agent clearing models.

“We are pleased that the SEC took action to approve FICC’s rule filings related to access models and segregated accounts and margin. With these approvals, we are now ready to advance our implementation efforts with the industry, in preparation for next year’s deadlines,” DTCC said in a statement.

“We’re also appreciative of all of the comments and perspectives that the industry has shared with us on a range of matters, including default management, done away and porting. Additional work remains as we get ready for implementation, and we are committed to ensuring we deliver the best solutions with the best value for the industry.

“The expansion of US Treasury clearing is a significant industry-wide effort that promises to deliver critical benefits to the industry, including increased transparency and reduced risk.  We will continue to work closely with our clients and key stakeholders on ensuring safe, smooth and successful implementations in 2025 and 2026.”

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Both the idea of an increase in the penalty rates and a change in design of the mechanism were in play – with the latter potentially including progressive rates – under changes to the Central Securities Depositories Regulation (CSDR).

However, the European Securities and Markets Authority (ESMA) said this week that in light of market feedback it would not recommend fundamental changes to the methods for calculating penalties, in its final report on the Technical Advice for the European Commission.

ESMA said it recognised that a significant increase of penalty rates may divert resources from expected investments and costs for the industry in the context of the move to T+1.

Instead, a moderate increase has been recommended, which ESMA said was “in full alignment with the current types of settlement fails and targeting most asset classes.” 

While the highest rate would remain one basis for settlement fails due to lack of liquid shares, there could now be an increase by 50% to 0.75 basis points if the reason is a lack of illiquid shares, bonds other than sovereign bonds and all other financial instruments including ETFs.

ESMA also raised the floor for settlement fail due to a lack of cash.

In addition, the EU watchdog’s technical advice included that, in the absence of an overnight interest credit rate due to the monetary policy of the central bank issuing the settlement currency, other comparable interest rates of the ECB and the relevant central bank could be used to calculate a proxy which a CSD can use to calculate the cash penalties due to lack of cash. 

In order to prevent the accumulation of reference data over time and to ensure the efficient operation of securities settlement systems, ESMA has recommended to amend the relevant Level 2 provisions to allow CSDs to use the oldest available reference price for the calculation of the related cash penalties, where settlement instructions have been matched after the intended settlement date, and that intended settlement date is beyond 40 business days in the past from the matching date.

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Published in the watchdog’s final T+1 recommendations, ESMA recommends that the migration to T+1 occurs simultaneously across all relevant instruments – with a coordinated approach across the continent “desirable”.  

In a report, ESMA highlighted the increased efficiency and resilience of post-trade processes that a move to T+1 would facilitate, “achieving the objective of further promoting settlement efficiency in the EU, contributing to market integration and to the Savings and Investment Union objectives”.  

Shortening the settlement cycle in the EU “will undoubtedly change the way in which markets function today”, the report stated, affecting entities throughout the transaction and settlement chains with varying levels of impact.  

Regarding potential dates, ESMA recommends 11 October 2027 as the optimal date – considering the difficulties of going live of such a substantial project in November and December. The regulator also wishes to avoid the first Monday of October as the transition date, as it is the first Monday after quarter-end.  

ESMA said it will continue to work with the European Commission and the European Central Bank on work related to rules on settlement efficiency, adding that “all actors of the financial system will need to work on harmonisation, standardisation, and modernisation to improve settlement efficiency”.  

It is expected that existing CSDR and settlement discipline regulation will need to be amended, in order to “have the legal certainty and to foster the necessary improvements in post-trading processes”, the watchdog said.  

The move aligns with the proposed move to T+1 in the UK – which was announced in September. Last month, the European T+1 Industry task force voiced support for a co-ordinated move to T+1 in the EU, acknowledging the benefits of an aligned approach across the entire European region, including the EEA, the UK and Switzerland.   

“T+1 will allow EU capital markets to keep up with the evolution of other markets, putting an end to costs linked to the current misalignment of settlement cycles,” the report stated. “This will directly benefit the EU asset management industry, will contribute to the harmonisation of corporate event standards in the EU and will more generally contribute to the competitiveness of EU capital markets.” 

ESMA added that the costs and benefits related to the shortening of the settlement cycle have been difficult to quantify, however the benefits of risk reduction, aligning with global markets and margin savings represent key objectives for the EU capital markets.  

Andrew Douglas, chair of the T+1 Taskforce Technical Group, commented on the announcement, stating: “The UK Taskforce has always promoted a combined migration with UK, EU and CH moving together as our preferred solution and so on behalf of the UK Taskforce, I welcome this announcement of the European migration date for 11 October 2027. 

“We have worked closely with ESMA over the past 12 months sharing our progress and I am confident that this relationship will continue to develop as we look at how we can develop joint migration plans.”

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“Before I close, I want to say something about the SEC and its staff. It’s a remarkable agency. The staff and Commission are deeply mission-driven, focused on protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. 

“[…] It’s been a great honour to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world.”

The words came during his ‘Car Keys, Football, and Effective Administration’ speech yesterday, 14 November, for the Practicing Law Institute’s 56th Annual Institute on Securities Regulation.

Read more: US Senate approves Gensler for SEC chair role

Gensler went on share some personal details in his conclusion, highlighting that neither of his parents had completed university or worked in finance, instead investing their savings and benefitting from the securities markets’ ‘common-sense rules of the road’. 

“The SEC’s effective administration of well-regulated securities markets promotes trust. It’s what brings investors and issuers to the market like fans to a football game. It’s what underpins the world’s largest capital markets. It’s what has contributed to our nation’s great economic success these last 90 years.

“[…] I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance.” 

Gensler’s was appointed by the US Senate to chair the SEC in 2021, as part of the then-freshly appointed administration of President Joe Biden.

Prior to his various roles in public service, he spent 18 years at US investment bank Goldman Sachs working in mergers and acquisitions, fixed income and currency trading, and treasury. 

During his tenure, Gensler has faced consistent scrutiny from the market where some questioned his heavy-handed approach to regulation, with some having gone as far as to suggest that in some instances the SEC’s approach has been not only ‘over-reaching’ but also in some cases potentially ‘unconstitutional’.

Notably, Gensler’s potential departure comes as the incoming president prepares to begin their new term in two months’ time.

A spokesperson for the SEC confirmed that the regulator had no further comment when approached by The TRADE.

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Described as “the average positioning of IA member firms’ views”, the timeline put forward is one of the more aggressive, with most task forces and associations more on board with 2027.   

The IA did add however, that should one or more jurisdictions only be able to transition at a later date before the end of 2027, and can commit to this before the end of 2025, the others should move their transition date back to align.   

The trade body added In the event the UK opts to move to a T+1 security settlement cycle ahead of Europe, there should be a “safe-harbour” exemption on UK traded and settled exchange traded products – including ETFs, ETNs and ETCs – which should remain on a T+2 secondary market settlement cycle until the EU transitions, at which point the exemption should expire.   

Should the EU transition first, a similar “safe harbour” should apply. This should also apply to Eurobonds. 

“In the US, the 15 months set out in February 2023 for a May 2024 go-live was sufficient, with settlement rates achieved by the broader market being higher than prior to the transition,” the IA said in its paper.  

“Whilst the UK, EU and Swiss market infrastructure may be more complicated, it is our view that many of the lessons learnt, system upgrades and process changes that firms undertook for the US transition can be applied in a UK, EU and Swiss context, making T+1 transition achievable by Autumn 2026, 24 months from now.” 

The UK has all-but committed to 2027 now, with Europe’s top markets watchdog subsequently signalling its intentions for moving EU markets to a T+1 settlement cycle through a statement outlining both the urgency of acting and the preference for aligning with the UK and Switzerland. 

“In a period when jurisdictions are aiming to demonstrate and boost the competitiveness of their capital markets, the ecosystem’s ability to enact a fast but orderly transition to T+1 settlement is crucial,” the IA concluded. 

The paper outlines a range of considerations across the UK, EU and Switzerland. One other point was that there should be a recommendation, but not a regulatory requirement, to transition the mutual fund subscription and redemption settlement cycle to T+2 from the common T+3/4 in the UK and other popular EEA fund jurisdictions to coincide with the UK, EU and Swiss transition to T+1 in capital markets.

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