On 20 February 2025, the Bank of England (BoE) published a speech by Sasha Mills (Executive Director, Financial Market Infrastructure) that covers the theme of post trade innovation and is entitled ‘Innovation in UK Financial Markets – shortening the settlement cycle’.

Before getting into some of the specificities, Ms Mills confirmed that the BoE, along with the Financial Conduct Authority and HM Treasury, supports the UK’s move to T+1 as it will deliver various benefits including that a shorter settlement cycle will mean that firms and central counterparties face lower counterparty risks. However, transitioning to T+1 has certain challenges and Ms Mills focuses on adapting to multiple time zones and standardising and automating settlement instructions.

Ms Mills also covers the implementation plan published by the Accelerated Settlement Taskforce which effectively charts out how the UK industry can safely transition to T+1 settlement. And among the report’s ‘highly recommended’ actions is a direction for financial market infrastructures (FMIs) to ensure that their rulebooks are amended to accurately set out the updated T+1-compatible FMI systems and processes. In terms of ‘alignment’ Ms Mills mentions that the UK, EU and Swiss are working towards transitioning on the same date – 11 October 2027.

As a concluding comment Ms Mills states that FMIs and market participants need to do four things:

• Carefully read the implementation plan.
• Produce their own firm-specific project plans.
• Obtain the necessary funding to execute their project plans.
• Implement and test the changes to their systems and procedures in accordance with the timelines set out in the report.