T+1: A Strategic Inflection Point for Post-Trade Operations
An interview with Andrew Douglas on the UK and EU’s path to accelerated settlement
Setting the Scene
Following ESMA’s final report release in October, the industry has been actively engaged in discussions about the transition to T+1 settlement. To explore the latest developments, Ylva Arnberg spoke with Andrew Douglas, Chair of the UK Accelerated Settlement Taskforce and a seasoned post-trade expert with nearly 40 years of experience, to examine the challenges, overlooked areas, and opportunities this shift brings for firms across Europe and the UK.
The Strategic Imperative of T+1
Douglas emphasizes that the move from T+2 to T+1 is not a mere compliance exercise—it’s a strategic inflection point for the industry.
“You’re not just losing 50% of the available time—you’re losing 83% of the time to fix errors,” he explains. “That makes it highly unlikely firms can succeed by simply throwing more people at the process. Automation and strategic planning are essential.”
He warns that firms must look beyond their own operations and consider the entire post-trade chain. If one link in the chain remains manual or underprepared, the risk of settlement failure and penalties rises dramatically.
UK vs. EU: Structural Differences and Blind Spots
While the UK and EU are aligned on the need for T+1, Douglas points out key structural differences:
UK: One central securities depository (CSD) and a small number of CCPs.
EU: 31 CSDs and 18 CCPs, creating a far more complex infrastructure.
Another blind spot, he notes, is assuming that the US T+1 model applies directly to Europe. In the US, only brokers carry the obligation, whereas in Europe both counterparties are responsible.
“Read the documents. Reverse-engineer them into your back office. Don’t assume anything,” Douglas advises.
Preparing Smaller Firms: From Manual to Automated
For smaller firms still relying on manual processes, Douglas stresses the urgency of starting now. Research from the US transition showed that firms without automation faced up to an 18% increase in back-office staffing costs—a model he calls unsustainable.
Preparation requires two steps:
Internal readiness – Honest assessment of systems, resourcing, and strategic investment.
Ecosystem evaluation – Rigorous assessment of service providers’ preparedness, since the weakest link can undermine even the most efficient back office.
The Digital Agenda: Beyond Compliance
Douglas frames T+1 as more than a regulatory milestone—it’s the gateway to digital transformation.
“Think of T+1 as the entry point for tokenization, digital payment rails, and hybrid finance models. Get this right, and you’re well positioned for the future.”
He introduces me to the concept of HyFi (Hybrid Finance)—a blend of TradFi’s (Traditional Finance) regulatory safeguards and DeFi’s (Decentralized Finance) technological innovation. Scandinavian firms, with their reputation for innovation, have a real opportunity to shape this emerging landscape.
A Call to Action
Douglas concludes with a reminder that time is short. With fewer than 250 working days until October 11, 2027, holidays and absences will quickly erode the available preparation window.
“If you don’t express an opinion about how markets should be formed, don’t complain when it turns into something you don’t like,” he says, urging firms to engage actively in shaping the future of capital markets.
Closing Thoughts
The transition to T+1 is not just about meeting deadlines—it’s about securing investment, embracing automation, and preparing for a digital future. For firms across Europe, and particularly in Scandinavia, the challenge is clear: act now, think strategically, and seize the opportunity to help define the next era of financial markets.
/ November 2025