EU, UK and Switzerland issue T+1 testing plan ahead of joint move on 11 October 2027

This Testing and Readiness Plan, being dubbed the first of its kind to provide a framework for all market participants and financial market infrastructures (FMIs) to test their readiness, establishes cross market participation between the EU, UK and Switzerland.

The advantage of this is that “a significant proportion of participants expressed the need to implement unified T+1 programmes rather than establishing separate plans for each jurisdiction. That, combined with the similarity of our post-trade/pre-settlement processes, meant that a single programme covering the three ecosystems would be of significant benefit, which reflects the jointly agreed pan-European migration,” the plan reads.

Under T+1, certain trades must be settled just one business day after execution, and with the deadline just over six months away, the industry is on the precipice of a fundamental shift in how financial transactions are settled. According to the FCA, the “change is designed to improve market efficiency, reduce risk and align the UK with global settlement standards.”

Buy-side and sell-side firms, financial market infrastructures, and trade associations will need to prepare to make progress and resolve areas where challenges remain. “T+1 will reduce the time you have to process your transactions by around 80%. Planning early will be crucial,” the FCA added in their October 2025 statement.

The testing plan echoes this sentiment, stating that it “is a well-established metric that post implementation, participants will have approximately 20% of the currently available processing time to complete the same range and volume of tasks as they do under T+2. To ensure a smooth and successful transition, firms must automate, streamline processes and make use of all available settlement efficiency tools.”

Beyond general principles and business readiness activities, the report continues to say that the “success of your transition depends on each participant having timely and well‑controlled processes from trade execution through to settlement. This plan will help you test your compliance both individually and as part of the settlement chain.”

Giovanni Sabatini, chair of the EU T+1 Industry Committee, says: “Moving to T+1 is not merely a technical upgrade — it is a pillar of the Savings and Investment Union and a unique opportunity to remove friction from European capital markets. The fact that EU, UK, and Swiss authorities are delivering this together is a demonstration of what practical, functional cooperation can achieve. We are building a bridge, and this testing plan is a critical part of it.”

Andrew Douglas, chair of the UK T+1 Accelerated Settlement Taskforce adds: “As requested by industry participants, we have collaborated with the EU on the launch and implementation of this testing framework. It will help firms to design and execute their own test plan for individual solution components as well as full end-to-end testing. It also clearly shows that testing of the individual components can start now, allowing plenty of time to guarantee a smooth transition to T+1 by October 2027.”

Florentin Soliva, chair of the Swiss Securities Post Trade Council T+1 Task Force, concludes: “Switzerland’s inclusion in this joint programme reflects our markets’ deep integration with the wider European post-trade ecosystem. A coordinated approach is the only approach that makes sense.”

While the EU, the UK and Switzerland have made progress, new research from Aqua Global also released this week has revealed that banks are still playing catch-up and 23% of European banking leaders have no plans in place to prepare for T+1. Equating preparation for T+1 to ISO 20022 adoption, Aqua found that one in five experienced downtime and/or payment disruption during migration to the new ISO 20022 standard. Further, almost all respondents (97%) experienced challenges, with 65% still relying, at least in part, on translation tools to remain compliant.

Aqua believes that the same structural weaknesses are now surfacing in preparation for T+1 settlement and legacy systems are incapable of supporting compressed settlement windows without significant investment. Together, ISO 20022 and T+1 highlight that regulatory timelines are accelerating faster than banks’ infrastructure can adapt.

Cian Fernando, CEO of Aqua Global, says: “The migration challenges we’re seeing aren’t isolated incidents – they expose the structural limits of legacy payment architecture. Treating regulatory change as a tick-box exercise encourages short-term fixes that increase complexity. Banks that modernise natively reduce cost, operational risk and friction over time. As regulatory deadlines tighten and data requirements grow richer, banks relying on fragmented systems face rising operational risk and mounting cost pressures, with less capacity left to compete on customer experience.”