Policy paper

Accelerated Settlement Technical Group – Terms of Reference

Updated 28 March 2024

This was published under the 2022 to 2024 Sunak Conservative government

Background

• The Accelerated Settlement Taskforce (AST) was set up in December 2022 to examine the case for trades to be settled more quickly in the UK, such as moving to a ‘T+1’ standard settlement period.
• Their report was published on 28 March 2024. The report recommended that the UK should commit to moving to a T+1 standard settlement cycle.
• The report recommended a number of technical and operational changes that would be necessary for the UK to be ready to move to T+1. It also recommended that a new group be set up to determine the details of these technical changes.
• The report also recommended that this group should select an appropriate date for the UK to transition to T+1 – this date should be no later than 31 December 2027, although the UK should engage with other European jurisdictions to see if they can align their moves to T+1.
• The government has accepted the recommendations made to government and has established the Accelerated Settlement Technical Group to carry out the next phase of the work.

Objectives

The Technical Group is asked to:

1. Determine the appropriate scope of a UK move to T+1, in terms of activity, asset class and territorial application, including any exemptions or safe harbour mechanisms that may be necessary.
2. Assess the technical and operational changes outlined in recommendation 5 of the AST report and recommend how they should be implemented – for example if they require legal or regulatory changes, or if they can be achieved through common industry standards – and recommend a date in 2025 for these changes to be mandated under the phased approach described in section 6 of the report.
3. Recommend any other common operational standards, processes and systems for the industry and/or regulatory authorities to adopt ahead of the move to T+1 in the UK in order to ensure safe and effective implementation of T+1 when it becomes mandatory.
4. Examine the issues identified in section 5 of the AST Report on the key challenges and costs of a move to T+1 and recommend solutions.
5. Identify any lessons that could be learned from other jurisdictions, including the upcoming transition to T+1 in North America, and make appropriate recommendations.
6. Select a date for the UK transition to T+1. This should be no later than 31 December 2027, subject to the possibility of alignment with other European jurisdictions as described in recommendation 3 of the AST report.
7. Recommend how progress towards implementation should be monitored and managed, including what role the Technical Group could continue to play after it has published its recommendations

Reporting timeline

• The government has asked the Technical Group to produce a report with its findings and recommendations by the end of 2024. These recommendations may include actions for government, the UK financial services regulators and industry participants.

Governance

• The government has appointed Andrew Douglas to chair the group. Andrew has worked for 35 years in the post trade industry, most recently at the Depository Trust and Clearing Corporation (DTCC).
• The group will consist of an oversight committee and various workstreams set up to address particular issues. The Chair will determine the necessary workstreams and who should lead them.
• The chair shall invite relevant representatives from different parts of the industry to be members of the oversight committee, or the workstreams. The oversight committee should meet regularly to assess the progress of the workstreams.
• Representatives from HM Treasury, the Bank of England and/or the Financial Conduct Authority may attend meetings of the oversight committee.