Financial markets will be modernised to drive capital market competitiveness and deliver growth - the priority of the government's Plan for Change.
Chancellor hosts senior representatives of investment banking and asset management sectors in No11 to hone Financial Services Growth and Competitiveness Strategy.
Meeting comes as government goes further and faster to drive economic growth through the Plan for Change by speeding up settlement of securities trading, such as buying and selling shares.
Change brings the UK in line with best-in-class international markets such as the US, strengthens capital markets competitiveness, and cut costs for investors.
The government, the Financial Conduct Authority and the Bank of England support the industry recommendation to move to T+1 settlement in UK markets by 11 October 2027 and call on industry to engage with the recommendations and start their planning as soon as possible.
In a meeting with the country's top bankers, the Chancellor set out a plan to speed up settlement of securities trades which will make the UK's capital markets more competitive to drive economic growth through the Plan for Change and put more money into people's pockets.
The top brass from JP Morgan, Blackrock, Abrdn, Morgan Stanley, Goldman Sachs, Citi, Fidelity, and Schroders were welcomed into No11 Downing Street for breakfast this morning, as part of ongoing engagement with industry to hone the Financial Services Growth and Competitiveness Strategy - one of the eight key growth sectors identified in the Modern Industrial Strategy.
Rachel Reeves spoke about the importance of going further and faster to drive growth and revealed that the Government had accepted all recommendations made by the Accelerated Settlement Technical Group - confirming that the UK will move to a 'T+1' standard for settling securities trades from 11 October 2027.
The change means that a typical securities trade, such as buying and selling shares, would be settled the day after it is agreed - instead of the current two-day standard. Faster settlement will support economic growth by putting the UK at the forefront of modernised, highly efficient and automated capital markets, bringing the UK into line with key international markets such as the US and reducing costs for investors by limiting risks when making trades.
Chancellor of the Exchequer, Rachel Reeves said:
I am determined to go further and faster to drive growth and put more money into people's pockets through our Plan for Change. Speeding up the settlement of trades makes our financial markets more efficient and internationally competitive.
Chief Executive Officer of the Financial Conduct Authority, Nikhil Rathi said:
We highlighted how the move to T+1 will make our markets more efficient and support growth in our recent letter to the Prime Minister. We will support industry as they move to T+1 and expect firms to engage and plan early.
Governor of the Bank of England, Andrew Bailey said:
Shortening the UK securities settlement cycle to T+1 will bring important financial stability benefits from reduced counterparty credit risk in financial markets. It is important that firms and settlement infrastructures have robust plans for an orderly transition in October 2027. As part of this effort, the Bank looks forward to continuing dialogue with regulators in other markets which are pursuing similar changes.
The government has accepted all the recommendations made by the Accelerated Settlement Technical Group, which has created a detailed implementation plan to ensure a smooth transition to T+1, and confirmed that it will bring forward legislation to implement the change, including setting the date to move to the new standard.
Terms of Reference have been published for the next phase of the project, which will continue to be led by the industry taskforce with Andrew Douglas as chair and HMT, the FCA and the Bank as observers. Industry chairs from the EU and Switzerland have also been invited to observe the UK industry taskforce to encourage alignment across Europe.
The taskforce will oversee and manage implementation of the recommendations up until T+1 is successfully implemented, and for a short period afterwards to evaluate the short-term impacts.
The government, the Financial Conduct Authority and the Bank of England support the industry recommendation to move to T+1 settlement in UK markets by 11 October 2027 and call on the industry to engage with the recommendations and start their planning as soon as possible.
Notes
Stakeholder commentary:
Tiina Lee, Chief Executive Officer of Citi UK said:
We welcome the move to a T+1 settlement cycle in UK markets and appreciate the hard work in achieving the alignment of timelines with the EU. Based on Citi's experience with global investors, coordinated market reforms are critical to the growth and competitiveness of the UK. We look forward to working with other industry participants to ensure a smooth transition in October 2027.
Conor Hillery, Deputy CEO & Head of Investment Banking in EMEA, JP Morgan, said:
We welcome the Chancellor's continued dialogue with UK financial services on its role in facilitating growth, which requires the right policy and regulatory framework. This move to a modern T+1 settlement cycle will contribute to keeping London as a competitive financial centre, so we support the government's efforts to make it happen.
Clare Woodman, Head of EMEA and CEO of Morgan Stanley said:
We welcome the UK Government's commitment to move to a T+1 settlement cycle in October 2027. The shift to a shorter settlement cycle will generate market efficiencies supporting the competitiveness of UK markets.
Additional notes:
The Accelerated Settlement Taskforce recommended that the UK should move to T+1 by the end of 2027. The Technical Group was set up to recommend a detailed implementation plan, including determining the detailed technical and operational changes needed to move to T+1 as well as recommending a precise implementation date.
The group's recommendations are set out in The Accelerated Settlement Taskforce Technical Group report , published on 6 February.
The government's response to the report and Terms of Reference for the next stage of the project can be found on the Accelerated Settlement (T+1) GOV.UK page
To support firms during the transition, the FCA has launched a webpage dedicated to the UK's move to T+1 settlement , where firms can access further information, key messages and links to relevant materials.
The Bank will support the relevant financial market infrastructures (FMIs) it supervises during the transition to T+1. It will discuss with relevant FMIs their preparedness for T+1 settlement and will encourage them to take appropriate implementation action.
The businesses in attendance at the meeting in No11 were: JP Morgan; Blackrock; Abrdn; Morgan Stanley; Goldman Sachs; City; Fidelity; Schroders. Pictures will be uploaded to HM Treasury's Flickr .
