The Path to T+1: What Accelerated Settlements Mean for Asia-based Firms
The implementations of T+1 in China, India, Canada, the US, Mexico, Peru and Argentina have been major accomplishments that accounted for over USD59 trillion of market capitalization.1 One year on, attention is now shifting across the Atlantic towards T+1 transitions in the UK, European Union and Switzerland in October 2027.
The upcoming transitions to T+1 settlements in the UK and Europe present a range of challenges and opportunities for Asia based investors, many of which we have seen before with the North American T+1 transition. As more markets move to optimize settlement flows in an accelerated settlement environment, the emphasis will increasingly shift toward automation across funding, foreign exchange, securities lending and core trade processing, making efficient technology solutions critical to ensuring operational resilience.”
Now, in between these two major milestones, it would be easy for the industry in 2025 to believe that it has more than enough time to prepare for the gradual path of transitions that lie ahead. In actual fact, firms have far less time than they think to ready themselves for the globalization of T+1. This year is a critical juncture in the industry’s path towards readiness, particularly for investors based in Asia-Pacific.
Based on an industry poll as part of Citi’s Securities Services Evolution whitepaper in the immediate aftermath of the North American T+1 transitions, 23% of firms’ project activity for the North America’s transition to T+1 was scheduled to be undertaken in 2025 or later (Figure 1) – with firms now beginning the complex and fundamental changes that they preferred to avoid during a major transition year (notably in cash management, forecasting, inventory management and securities lending). With flows and processes increasingly stable, 2025 is the year that investors into North America finish the job.
Looking ahead, 2025 is also the year when critical infrastructure investments must be undertaken by those holding and trading UK securities, given the requirement for all allocation and confirmation activity to be completed on a T+0 basis from December 2026 onwards.
T+1 is more than just a European concern. With market consultations and discussions ongoing in Australia, Brazil, Hong Kong, Japan and Singapore, the scope of those impacted by accelerated settlements – as well as the diversity of requirements triggered for these firms – is set to increase rapidly.
As Australia and New Zealand eye their own transitions in 2030 (essentially one year after Australia’s CHESS migration), the world is now likely faced with a five-year window in which to transition the majority of its investment flows globally.
This report provides a quick guide to the key challenges and risks that investors, broker/dealers and custodians in Asia-Pacific are likely to face as they move ever-closer to the next wave of global market settlement transitions. It is based on insights from ongoing market consultations across the world and on statistical data drawn from recent ValueExchange polls in February 2025 (including responses from 550+ firms globally).
[1] ValueExchange research
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