Rollo Burgess, Partner at Capco, comments on the EU T+1 Industry Committee’s High-Level Road Map for the EU’s transition to a T+1 settlement cycle for securities, which is being launched by the committee on July 3.
“The EU’s T+1 plan is a significant milestone for the European financial services sector. It serves as a complete and unequivocal commitment to the implementation date of October 11, 2027, and places the EU firmly on track to align with the UK and Swiss markets.
Firms Best Be Ready
“While this remains an industry-led initiative, the tone and character of the EU’s output reflect a higher degree of involvement from official agencies compared to the more hands-off UK process. This is particularly evident in the recommendations, which are framed under an ‘adhere or explain’ approach. Though non-binding, this signals a clear expectation, and firms should be prepared to justify any areas of non-adherence with a good, well-reasoned rationale.
“That said despite the different approaches taken to plan development, ultimately the fundamental principles and recommendations of the EU’s plan are strongly aligned with the UK’s February plan, with both placing specific emphasis on enhancing automation and eliminating manual processing across the post trade lifecycle, as well as targeted improvements, for example in Standard Settlement Instruction (SSI) handling.
“The EU has also placed considerable emphasis on defining the target-state operational day and identifying key gating events, and as expected, the handling of place of settlement (PSET) is also highlighted as a priority area. However, for many sell-side firms, the most challenging area will likely lie in inventory and liquidity management – where efficiency will be critical to business performance in a T+1 environment.”
About Capco
Capco, a Wipro company, is a global management and technology consultancy specializing in driving digital transformation in the financial services industry. With a growing client portfolio comprising of over 100 global organizations, Capco operates at the intersection of business and technology by combining innovative thinking with unrivalled industry knowledge to fast-track digital initiatives for banking and payments, capital markets, wealth and asset management, insurance, and the energy sector. Capco’s cutting-edge ingenuity is brought to life through its award-winning Be Yourself At Work culture and diverse talent.
