DTCC warns Europe T+1 will force post-trade overhaul

DTCC and ValueExchange have published a report on Europe's post-trade operations and the shift to T+1 settlement. The research suggests the move to a shorter settlement cycle could drive wider changes across post-trade workflows.

The report examines how fragmented data and operational processes are affecting trade processing in Europe ahead of the market's planned move to T+1 settlement in October 2027. It argues that, as settlement times shorten, firms face growing pressure to reduce manual work, improve data consistency and better connect middle-office and back-office functions.

Under a T+1 model, trades settle one business day after execution rather than two. According to the study, that change will compress settlement timelines by about 83%, leaving market participants less time to deal with trade exceptions, incorrect standing settlement instructions and mismatched data.

The findings point to growing operational strain. Settlement volumes across Europe rose 15% in 2025, while failed trades increased 21%, the research found.

The study also suggests many firms remain reliant on older processes. Only 33% of European middle offices have invested in automated storage and exchange of standing settlement instructions, while about 68% of firms still rely on some level of manual trade matching.

The report also highlights readiness for PSET requirements as another concern, indicating that only 62% of firms appear prepared.

Workflow gaps

The research identifies fragmentation across the trade lifecycle as a central obstacle to better settlement outcomes. Separate systems and repeated handling of the same information can create duplication across operations teams, delay settlement instruction creation, and reduce visibility between post-trade processing and final settlement.

A more joined-up operating model could help firms create a single agreed source of trade data, reduce rekeying and automate the flow of settlement instructions. The report also points to existing market infrastructure, including automated trade matching and industry reference data utilities, as a starting point for firms seeking to simplify operations.

That focus reflects broader industry efforts to prepare for a shorter settlement cycle without adding operational risk. Europe's market structure is more fragmented than in some other regions, with multiple trading venues, custodians, central securities depositories, and local market practices, making standardisation harder to achieve.

The research indicates that some of the tools needed to improve settlement efficiency are already available. The central issue, it suggests, is whether firms and market utilities can adopt them more widely and connect them more effectively across the trade lifecycle.

Val Wotton, Managing Director, Global Head of Equities Solutions at DTCC, commented on the report's conclusions.

"The move to T+1 should not be viewed simply as a regulatory milestone, but as a catalyst for industry-wide transformation," said Val Wotton, Managing Director, Global Head of Equities Solutions at DTCC.

"The research demonstrates that many of the capabilities needed to improve settlement efficiency already exist today. By reducing fragmentation, improving data consistency and connecting workflows across the trade lifecycle, the industry has an opportunity to create a more scalable, resilient and efficient operating model for the future," Wotton said.

The findings add to a wider debate across European capital markets about how far firms must change their operating models before T+1 takes effect. While automation projects and standardisation efforts are already underway in parts of the market, the report indicates uneven adoption remains a barrier.

For banks, brokers, asset managers and post-trade service providers, that leaves limited room for delay. Higher trading volumes, rising failed trades and compressed settlement windows mean back-office resilience is becoming a more immediate concern rather than a longer-term efficiency project.

DTCC is one of the largest post-trade market infrastructure groups in global finance. In 2025, its subsidiaries processed securities transactions valued at USD $4.7 quadrillion, while its depository subsidiary provided custody and asset servicing for securities issues from more than 150 countries and territories valued at USD $114 trillion.