With digitisation reforms now on track, the next subject of conversation in terms of securities registry and market evolution will likely soon be focused on the move to T+1 settlement. Again, the UK is lagging other leading markets here and the reality seems to be that evolution of the blockchain could well present some interesting challenger propositions here but as it stands, October 11th 2027 is the target date for faster settlement.
The key objectives here are to enhance market efficiency, reduce counterparty risk and better align the UK with global competitors. All virtuous ambitions even if there are plenty of voices questioning whether faster settlement will provide any meaningful benefit, or simply make errors harder to correct at a later point in time. Regardless, these changes come with specific operational and compliance implications, so the real question is what should issuers and their adviser be expecting from their registrars today to ensure they can future-proof against this change tomorrow?
A renewed focus on digitisation – not being fully dematerialised by the time T+1 settlement arrives will be a headache.
Following the government’s acceptance of the recommendations of the Digitisation Taskforce, CSDR is now in the final stretch and any remaining paper share certificates will be consigned to history in the coming years. Ironically however the October 2027 plan to move to faster settlement cycles is ahead of any firm plan to complete that digitisation process. The risk of settlement failure on a T+1 cycle where paper certificates still exist could be reduced if custodians insist shares are dematerialised before trading – but still needs to remain a consideration.
Back office disruption.
The fact digital-first platforms now become a necessity, not just a nice-to-have, means you should expect to see changes and ultimately enhancements to your back office functionality and the way you interact with the register. Being prepared for change here will help any transition. Don’t leave the necessary education until the last minute.
Easier execution of corporate actions, but…
The move to T+1 settlement will make it easier for securities owners to move on or off the register in a more appropriate time frame, to qualify for – or remove themselves from – participation in corporate actions. However this will increase the burden on Company Secretary offices or Investor Relations departments to ensure back end systems are updating in real time. Batch processing should have been consigned to the 20th Century, but we know it still remains a reality for many.
The real risk of getting this wrong.
We have seen the penalties that are applied in other markets when settlement fails or faces delays – and they can be punitive. The move to T+1 adds to pressure to ensure that all aspects of corporate records are up to date and free from errors. The window for manual corrections will contract dramatically as a result of these changes and whilst the registrar will likely be held accountable, the cost will need to be met somewhere. Engaging with them early and undertaking an audit to ensure records are in good order will save in the longer term.
Cross-border trade presents additional challenges.
We have looked at this from the perspective of the domestic market, but it’s worth adding that as more national exchanges move to shorter settlement cycles, added challenges are presented for those transacting on a cross-border basis. Whilst in some instances time zones will actually offer a few extra valuable hours to match trades, the treatment of this – especially with regard to companies dual listed in both Australia and the UK – will require additional consideration.
An amended version of this article originally appeared in the September 2025 version of AIM Journal. You can download a printable version here.