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Key Points
- The regulatory impetus: In the EU, T+1 settlement becomes mandatory on 11 October 2027 under Regulation (EU) 2025/2075, which amends the Central Securities Depositories Regulation (CSDR). The Regulation was adopted on 8 October 2025 and entered into force on 3 November 2025.
- Reduced settlement risk & capital usage: A shorter lifecycle lowers counter-party and settlement risk, and potentially reduces collateral/margin demands.
- Efficiency and competitive advantage: Faster settlement liberates liquidity, supports higher turnover and better market responsiveness.
- Significant operational challenge: For securities finance and SFTs (repo, securities lending, collateral reuse), compressed timelines raise complexity in trade matching, allocations, recalls and collateral moves.
Some SFTs are exempt, but what’s the bigger picture?
Not every securities financing transaction falls within the mandatory T+1 settlement requirement.
Under the amended Article 5(2) of CSDR, securities lending and borrowing, repurchase transactions, and buy-sell back or sell-buy back transactions may benefit from an exemption, provided they are documented as single transactions composed of two linked operations.
However, the exemption must be considered alongside the general scope of CSDR’s settlement-cycle requirements. Transaction classification and contractual documentation are therefore important elements of regulatory compliance.
More importantly, the exemption does not remove the operational impact of T+1 on securities finance.
Consider a securities lending transaction where the beneficial owner subsequently sells shares that are currently on loan. While the securities lending transaction itself may be exempt from mandatory T+1 settlement, the underlying market sale will generally need to settle on T+1 if it falls within the regulation’s scope. This means the lender must recall the securities and ensure they are returned in time to meet the settlement obligation arising from the sale.
The resulting challenges extend beyond settlement processing:
- Earlier identification and automated initiation of securities lending recalls
- Faster communication between investment managers, agent lenders, borrowers and custodians
- Real-time inventory visibility and settlement availability
- More efficient collateral release and substitution processes
- Automated exception management and settlement-fail prevention
The distinction is important: SFTs may be exempt from the mandatory settlement cycle, but securities finance operations remain directly exposed to its consequences.
Implications specifically for securities finance:
- Borrowers and lenders will have less time to confirm, allocate and settlement processes.
- Collateral sourcing and movement must operate with higher automation and revised liquidity planning.
- Recalls, fails and exception resolution become more critical.
- Funding and FX mismatches, particularly cross-border, may grow if not addressed.
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H1 27
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We work with you to map your current securities finance, repo and collateral workflows against the demands of a T+1 regime: process bottlenecks, manual touch-points, settlement risk exposures, vendor dependencies and client-servicing constraints.
Based on our analysis we co-create a multi-year roadmap:
Short-term: quick wins and tactical response (e.g., streamlining recall workflows, enhancing data feeds)
Mid-term: technology and operating model upgrades (STP, real-time matching, intra-day collateral orchestration)
Long-term: fully optimised state where T+1 becomes ‘business as usual’ and you are positioned to further compress or move to T+0 if market-forces drive it
We support system selection/integration, process redesign, vendor management (custodian, agent lending, triparty), automation, change-management and training for stakeholders across front-office, operations, collateral and risk.
Given our specialisation in securities financing and collateral management, we bring domain-specific tools and best-practices:
Real-time visibility of borrow, lend and repo flows
Automated recall and return handling
Collateral optimisation under compressed settlement cycles
Systemic monitoring of fails, recall risk and liquidity provisioning
We assist you to embed new controls, dashboards and governance frameworks to monitor T+1 readiness and ongoing performance — aligning with your existing ISMS, risk management and audit frameworks.
We work with you to map your current securities finance, repo and collateral workflows against the demands of a T+1 regime: process bottlenecks, manual touch-points, settlement risk exposures, vendor dependencies and client-servicing constraints.
Based on our analysis we co-create a multi-year roadmap:
Short-term: quick wins and tactical response (e.g., streamlining recall workflows, enhancing data feeds)
Mid-term: technology and operating model upgrades (STP, real-time matching, intra-day collateral orchestration)
Long-term: fully optimised state where T+1 becomes ‘business as usual’ and you are positioned to further compress or move to T+0 if market-forces drive it
We support system selection/integration, process redesign, vendor management (custodian, agent lending, triparty), automation, change-management and training for stakeholders across front-office, operations, collateral and risk.
Given our specialisation in securities financing and collateral management, we bring domain-specific tools and best-practices:
Real-time visibility of borrow, lend and repo flows
Automated recall and return handling
Collateral optimisation under compressed settlement cycles
Systemic monitoring of fails, recall risk and liquidity provisioning
We assist you to embed new controls, dashboards and governance frameworks to monitor T+1 readiness and ongoing performance — aligning with your existing ISMS, risk management and audit frameworks.
- Securities Lending & Borrowing Optimisation:
Review and redesign of lending/borrowing workflow to support compressed cycles. - Repo & Financing Lifecycle Management:
End-to-end support for repo books, trade-matching, collateral mobilisation, recall/return automation. - Collateral & Liquidity Advisory:
Strategy for optimised collateral allocation, reuse frameworks, intra-day liquidity planning under T+1. - Recall, Return & Fail-Lifecycle Automation:
Implementation of workflows to minimise recall-processing time, reduce settlement fails and manage penalties. - Operating Model & Technology Integration:
Selection and integration of front-to-back systems, agent/third-party connectivity, data architectures and governance. - Training, Change Management & Audit-ready Governance:
Ensuring your teams are prepared, procedures updated, controls embedded and monitoring dashboards operational.
- Securities Lending & Borrowing Optimisation:
Review and redesign of lending/borrowing workflow to support compressed cycles. - Repo & Financing Lifecycle Management:
End-to-end support for repo books, trade-matching, collateral mobilisation, recall/return automation. - Collateral & Liquidity Advisory:
Strategy for optimised collateral allocation, reuse frameworks, intra-day liquidity planning under T+1. - Recall, Return & Fail-Lifecycle Automation:
Implementation of workflows to minimise recall-processing time, reduce settlement fails and manage penalties. - Operating Model & Technology Integration:
Selection and integration of front-to-back systems, agent/third-party connectivity, data architectures and governance. - Training, Change Management & Audit-ready Governance:
Ensuring your teams are prepared, procedures updated, controls embedded and monitoring dashboards operational.
- Securities Finance Domain Expertise:
We combine deep understanding of securities lending, repo, collateral and SFT ecosystems with operational and technology advisory. - End-to-end View:
Unlike vendors who focus narrowly, we link front-office, operations, collateral, technology and risk into a coherent T+1-readiness programme. - Client-centric & pragmatic:
We prioritise interventions that combine regulatory compliance with competitive advantage — not just ticking boxes. - Change-ready framework:
Given your existing achievements in incident management, ISMS alignment, access control and software-development governance, we are aligned to your maturity. - Germany / DACH & international access:
With expertise in European regulation and global securities markets, we can support your cross-border challenges too.
- Securities Finance Domain Expertise:
We combine deep understanding of securities lending, repo, collateral and SFT ecosystems with operational and technology advisory. - End-to-end View:
Unlike vendors who focus narrowly, we link front-office, operations, collateral, technology and risk into a coherent T+1-readiness programme. - Client-centric & pragmatic:
We prioritise interventions that combine regulatory compliance with competitive advantage — not just ticking boxes. - Change-ready framework:
Given your existing achievements in incident management, ISMS alignment, access control and software-development governance, we are aligned to your maturity. - Germany / DACH & international access:
With expertise in European regulation and global securities markets, we can support your cross-border challenges too.