Britain's financial markets will soon adopt faster settlement periods for securities trades, as Chancellor Rachel Reeves confirmed the UK will move to a 'T+1' standard from 11 October 2027.

The change means securities trades, such as buying and selling shares, will be settled the day after they are agreed, rather than the current two-day timeframe. The move brings the UK in line with international markets such as the United States.

The chancellor announced the decision during a meeting with senior representatives from the investment banking and asset management sectors at 11 Downing Street. Top executives from JP Morgan, BlackRock, Abrdn, Morgan Stanley, Goldman Sachs, Citi, Fidelity, and Schroders attended the breakfast gathering.

"I am determined to go further and faster to drive growth and put more money into people's pockets through our Plan for Change. Speeding up the settlement of trades makes our financial markets more efficient and internationally competitive," said Rachel Reeves, chancellor of the exchequer.

The government has accepted all recommendations made by the Accelerated Settlement Technical Group, which created a detailed implementation plan for the transition. The change is expected to strengthen capital markets competitiveness and reduce costs for investors by limiting risks when making trades.

Nikhil Rathi, chief executive officer of the Financial Conduct Authority, commented: "We highlighted how the move to T+1 will make our markets more efficient and support growth in our recent letter to the Prime Minister. We will support industry as they move to T+1 and expect firms to engage and plan early."

The Bank of England also expressed support for the change. "Shortening the UK securities settlement cycle to T+1 will bring important financial stability benefits from reduced counterparty credit risk in financial markets," said Andrew Bailey, governor of the Bank of England.

Industry leaders welcomed the announcement. Tiina Lee, chief executive officer of Citi UK, said: "We welcome the move to a T+1 settlement cycle in UK markets and appreciate the hard work in achieving the alignment of timelines with the EU."

Conor Hillery, deputy chief executive officer and head of investment banking in EMEA at JP Morgan, added: "This move to a modern T+1 settlement cycle will contribute to keeping London as a competitive financial centre, so we support the government's efforts to make it happen."

The next phase of the project will be led by an industry taskforce, with Andrew Douglas as chair and HMT, the FCA and the Bank of England as observers. Representatives from the EU and Switzerland have also been invited to observe, encouraging alignment across Europe.

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