T+1 Settlement Cycle

The settlement cycle refers to the period between the execution of a securities transaction and its final settlement. Settlement occurs when the asset’s ownership is transferred from the seller to the buyer, and payment is exchanged accordingly. The trade date is denoted as “T”, followed by the number of business days until settlement (for example, T+2 or T+1).

Historically, most global capital markets operated on a two-business-day settlement cycle (T+2). However, there is a growing trend across financial markets to adopt shorter settlement cycles. Moving to a shorter cycle, such as T+1, offers several advantages for investors and market participants, including lower costs, enhanced market efficiency, and reduced credit, counterparty, and settlement risks—especially during periods of high trading volume and volatility.

In many markets, this shift means reducing the standard settlement period from two business days after the trade date (T+2) to one business day (T+1), subject to the types of securities involved.

Colombia, Chile, and Peru have confirmed their transition to a T+1 settlement cycle in Q2 2027, with Brazil planning to follow by February 2028 to align with global standards.

EMEA:

The UK, EU & Switzerland announced separately the move to T+1 by 11 October 2027. This shift requires robust strategic planning, industry-wide collaboration, and coordination.

• UK: Guided by the Accelerated Settlement Taskforce (AST), the UK is prioritising standardisation, automation, and same-day allocations. Firms are encouraged to eliminate manual processes and ensure allocations and settlement instructions are completed within hours of trade execution.
• EU: Under ESMA, the EU faces the complexity of multiple markets and infrastructures. The focus is on harmonised data standards, consistent reporting, and shared operational expectations among brokers, custodians, asset managers, and depositories.
• Switzerland: The Swiss Securities Post-Trade Council (SwissSPTC) has published final T+1 recommendations on 14 Nov¹, with next steps to define market practices to comply with high-level recommendations.
• Turkey: Borsa Istanbul has requested market participants to prepare for T+1 by the end of 2026².

Asia:

• Pakistan will implement T+1 on 9 February 2026³.
• Hong Kong: HKEx aims for technical readiness by 2025, with ongoing consultations and further discussions scheduled for Q1 2026.
• Australia: The market consensus is to transition post-CHESS replacement, earliest by 2030.
• Singapore, Taiwan: Both are in exploratory and consultation stages, with no confirmed timelines.
• Thailand: SET will establish a T+1 working group in 2026, currently studying international models.
• South Korea: An industry taskforce is formed, targeting early 2028 implementation, pending formal announcement.
• Japan: The FSA is monitoring global T+1 trends, especially in Hong Kong, Singapore, and Australia.
• Malaysia: Bursa Malaysia has launched an industry working group for feedback.

The Asia Securities Industry & Financial Markets Association (ASIFMA)⁴ recommends comprehensive assessment and careful planning to address the region’s unique structural and regulatory challenges, balancing increased costs against the benefits of accelerated settlement.

For more information on the implementation of T+1 in specific countries/regions please visit our dedicated pages:

• T+1 settlement cycle in the US, Canada, and Mexico
• T+1 settlement cycle in the UK, EU, and Switzerland