UK to Shorten Securities Settlement Cycle by 2027

In a move to bolster London's capital markets, the UK government has confirmed that it will shift to a T+1 (next-day) securities settlement cycle on October 11, 2027. This decision aligns the UK with the European Union's timetable for similar changes, aiming to improve market liquidity and reduce credit risks. The transition to a shorter settlement period was accelerated by challenges observed during the COVID-19 pandemic, where delays in settlement were highlighted as significant issues. By synchronizing with the EU and Switzerland, the UK seeks to minimize trading disruptions across Europe. The announcement followed a meeting between UK Chancellor Rachel Reeves and senior executives from major financial institutions, with the Bank of England endorsing the move for its potential benefits to financial stability.