Lessons from T+1 settlement: Risk mitigation and future implications

David Petiteville
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David Petiteville: RBC Investor Services Trust, Canada

Journal of Securities Operations & Custody, 2025, vol. 17, issue 3, 234-252

Abstract: The transition to a T+1 settlement cycle marks a significant milestone in the evolution of global securities markets. This paper examines the key operational, technological and strategic challenges encountered during implementing T+1 and the lessons learned by early adopters, particularly in the US and Canada. The accelerated settlement cycle, designed to reduce counterparty risk and enhance market efficiency, demands a fundamental rethinking of post-trade workflows, requiring companies to adopt automation, streamline processes and foster cross-industry collaboration. The paper also highlights the implications of compressed timelines for cross-border transactions and the critical role of regulatory frameworks in ensuring a smooth transition. In addition, the analysis explores the readiness of other jurisdictions, including the UK and Europe, which are planning transitions to T+1 by late 2027. Drawing on real-world examples and industry insights, this paper provides actionable guidance for companies navigating T+1 while considering the broader implications for future settlement cycles such as T+0. Additionally, the paper assesses how the takeaways from T+1 can shape the transition to T+0, particularly in automation, liquidity management and risk mitigation. This article is also included in The Business & Management Collection which can be accessed at https://hstalks. com/business/.

Keywords: T+1 settlement; post-trade workflows; risk mitigation; global securities markets; operational efficiency; regulatory frameworks; T+0 (search for similar items in EconPapers)
JEL-codes: E5 G2 K22 (search for similar items in EconPapers)
Date: 2025
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