Euroclear Confirms UK T+2 Settlement from Next Year

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Shortened settlement cycles are a key plank of regulatory strategy for harmonization across Europe.

Euroclear UK and Ireland has said it is coordinating with a number of UK venues to ensure that shortened local settlement cycles will be in effect from 2014, in line with regulatory mandates.

The central securities depository is working with the London Stock Exchange, Turquoise, the Irish Stock Exchange and BATS Chi-X Europe. The Central Securities Depository Regulation (CSD Reg), which is due to come into force on January 1, 2015, will shorten settlement to T+2, or two days after trade date, as a maximum. In advance of this, Euroclear is mandating all trades that settle through its facility on a T+3 basis currently must move to T+2 from October 6, 2014. This applies to both retail and institutional customers.

Euroclear, the company says, already has the capability for same-day settlement, given the agreement of both parties. Over-the-counter (OTC) transactions are exempt from the provisions of CSD Reg.

"I am delighted that our stakeholders and regulators have accepted our offer to coordinate the implementation of this industry-wide development in the UK and Ireland," says John Trundle, CEO at Euroclear UK and Ireland, stated. "Euroclear UK and Ireland is working collaboratively with industry practitioners to address and mitigate risks associated with the move to a shorter settlement cycle in order to ensure a very smooth and coordinated transition."

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