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Why T+1 Settlement Is a Goldmine for Post-Trade Tech
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Why T+1 Settlement Is Reshaping Global Markets
Historically, financial transactions of a certain size always moved sluggishly, often requiring the involvement of a legal professional and taking weeks or even months. With the emergence of modern finance and the stock market, transactions have been happening much more quickly.
Still, by today’s standards of digital instant communications, financial transactions are horrendously slow. It can take days for an international money transfer, and securities markets can take a while to finalize settlement as well.
This is now changing, in large part due to pressure from cryptocurrencies and fintech showing that the technology to do things better exists; it was just never properly deployed by legacy financial institutions like banks, investment funds, and securities markets.
On January 26, 2026, The Investment Association, the trade body for the UK investment management industry, released a report called “T+1 Settlement: Navigating the UK, EU and Swiss Transition,” discussing the need for securities markets to transition from a trade-date-plus-two (T+2) to a trade-date-plus-one (T+1) settlement cycle. This is just one step on the way to a T+0 settlement cycle that would bring finance into the modern era of instant data movement.
“With less than two years left until go-live, investment managers are at an important juncture with their T+1 implementation.
In addition to achieving the agreed regulatory milestones and ensuring compliance, firms have a critical opportunity to use this transition as a strategic initiative and a catalyst for post-trade modernisation.”
Galina Dimitrova – Director of Investment and Capital Markets at the Investment Association
As the UK is the second-largest investment management centre in the world and manages 35% of all assets managed in Europe, this report will have a far-reaching impact.
T+1 Settlements
Overview
The UK, EU, and Switzerland have confirmed that settlement in listed instruments will move to T+1 on October 11, 2027.
Source: The Investment Association
This follows the move in North America, which successfully transitioned to T+1 on May 28, 2024.
The North American transition means 60% of global trade volumes are now settling on T+1, putting European financial institutions at a disadvantage—especially as other major markets, including Singapore, Australia, and Japan, are actively evaluating similar transitions.
This will impact investment firms (asset managers/wealth managers), broker-dealers, and custodian banks, as well as Central Securities Depositories (CSDs) and clearing houses (Euroclear, Clearstream, SIX SIS, etc.).
Two-thirds of UK investment firms report being in active preparation mode for T+1, which drastically compresses the time available for trade confirmations, error resolutions, funding, and collateral management—all essential parts of a smoothly functioning securities market.
Source: The Investment Association
While this is driven by regulatory change, it is also a necessary shift as alternative financial systems like cryptocurrencies or fintech like Wise (WISE.L) have changed consumer expectations. Massive fees and the slow movement of money and assets will no longer be accepted when better options exist.
“T+1 should be viewed as a catalyst for modernising post-trade operating models rather than a pure compliance exercise.
Firms that succeed will use this window to simplify processes and enhance scalability across investment operations, fund operations, and securities financing.”
Report Recommendations
The Investment Association’s report boils down its recommendations into a few key points:
- Act now and ensure that project plans, governance, and budgets are in place.
- Accelerate automation across the post-trade lifecycle.
- Review and strengthen FX operating models.
- Prepare to move fund settlement cycles to T+2 by October 11, 2027.
- Ensure the accuracy and completeness of Standard Settlement Instructions (SSIs).
The first point makes it clear that inaction and delay are no longer options, especially when facing mounting competitive and regulatory pressure.
The second point highlights that tools like automatic trade release upon execution and real-time confirmation matching can no longer be overlooked.
The third point specifies that cross-border and cross-currency transactions will be the most error-prone and difficult to manage, requiring additional resources.
The fourth point notes that investor subscriptions/redemptions that settle on T+3 or T+4 will create liquidity and operational mismatches with portfolio trades that settle on T+1. Consequently, these must be accelerated as well. Overall, most fund managers are moving to be ready well before October 2027.
Source: The Investment Association
The fifth point emphasizes that preventable matching errors and settlement fails—which become significantly more costly and operationally disruptive under T+1—will require accurate Standard Settlement Instructions (SSIs). SSIs are pre-agreed, standardized details, such as bank names, account numbers, and BIC/IBAN codes.
Why T+1 Forces Post-Trade Infrastructure Upgrades
Moving to T+1 compresses the post-trade window to roughly 12–14 hours, requiring same-day (T+0) allocation and confirmation.
Until now, under T+2, there was ample time to resolve errors, but T+1 settlement eliminates this buffer entirely. This risk is exacerbated by Europe’s highly fragmented infrastructure, unlike North America’s centralized DTC structure.
Partial settlements—where a transaction settles for less than the full quantity when securities or cash are insufficient—will also play a larger role. These will minimize the impact of settlement failures and help firms avoid escalating penalties.
Lastly, some foreign currency pairs will be especially tricky to handle within short settlement times.
Czech koruna and certain Scandinavian currencies present particular challenges on Fridays of overlapping bank holidays, where executing FX on the settlement date can result in less favourable exchange rates.
Investing In Post-Trade Automation
| T+1 Pressure Point | What Breaks Under T+2 Habits | T+1 Requirement | Who Captures the Spend | Investor Signal |
|---|---|---|---|---|
| Allocations & confirmations | Manual breaks and late matching become settlement fails | Same-day (T+0) allocation + near-real-time confirmation matching | Post-trade workflow + matching platforms | Rising demand for STP + exception automation |
| FX for cross-border settlement | Late-day FX execution increases operational risk and cost slippage | Earlier cutoffs, automated FX decisioning, tighter netting | FX workflow, netting, and cash/ledger ops tooling | Spend shifts from people/process to automation |
| Standard Settlement Instructions (SSIs) | Bad SSIs drive preventable fails, penalties, and client friction | Clean SSI data + validation + controls | Reference data + SSI validation automation | Higher value on data integrity + governance |
| Funding & collateral | Less time to source cash/collateral; more intraday liquidity stress | Intraday visibility + automated funding workflows | Collateral + treasury ops platforms | Multi-year infrastructure budgets become “must-spend” |
| Exception management at scale | T+2 buffer disappears; exceptions cascade into systemic fails | Automated break detection, routing, and remediation | End-to-end post-trade automation suites | Higher switching costs + sticky recurring revenue |
Broadridge Financial Solutions
(BR )
The financial industry is a deeply interconnected web of institutions, commercial activities, and technology providers. As settlements and transactions move closer to matching the speed of other information technologies, fintech (financial technology) companies are becoming key partners to banks, funds, and insurers.
Broadridge is a fintech company servicing more than 10,000 public companies worldwide, settling more than $15 trillion in trades daily.
Source: Broadridge
The company provides technology solutions that automate the trading lifecycle for capital markets, wealth, and asset management.
Source: Broadridge
Broadridge is not a startup but a large company with over 15,000 employees operating in more than 100 countries. It processes equity trades for seven out of ten of the largest global investment banks and 21 out of 25 U.S. fixed-income primary dealers.
Broadridge also acts as the primary provider for proxy voting services, processing over 50% of proxy statements for public companies and mutual funds globally. It helps public companies manage shareholder communications, annual meetings, and data-driven investor reporting through its Investor Communication Solutions (ICS).
Source: Broadridge
The majority of the company’s revenues are recurring (65%), making its future income relatively easy to predict. Recurring revenues have grown by 6–16% annually since 2016.
The demand for faster, more efficient, and more secure transactions has driven rapid expansion overseas, with international revenues growing fivefold to $518 million from FY2015–2025. It is likely that the move of European markets toward T+1 will provide an additional boost for the company.
In addition to regulatory changes, the company’s business is supported by underlying growth trends, including an increasing number of people investing and higher trading activity per active investor.
Source: Broadridge
Overall, the underlying growth of the sector, the need for reliable and rapid implementation of change (which reduces competition from internally developed solutions), and Broadridge’s leadership in equity trade technology make it a promising growth stock poised to benefit from the expansion of the finance industry.
Latest Broadridge (BR) Stock News and Developments
