IA, PIMFA and AIMA issue recommendation on T+2 fund settlement

The Investment Association (IA), Personal Investment Management and Financial Advice Association (PIMFA) and Alternative Investment Management Association (AIMA) have joined forces to issue a recommendation encouraging firms to alter their fund settlement timings to T+2 on or before 11 October 2027. The recommendation aims to align fund settlements more closely with plans in the UK, EU and Switzerland to move securities trades to T+1 by the same date, and comes one-year after the milestone move in the US to T+1 for securities trading.

There is a general trend towards quicker settlement in global capital markets, to improve operational efficiencies, increase liquidity for investors and reduce manual processing demand. In a recent report from the government’s Accelerated Settlement Taskforce (AST), T+2 was identified as optimal for fund settlement, to provide cash management flexibility whilst minimising a potential funding gap with products settling at T+1.

Chris Cummings, CEO of the Investment Association, commented:

“As a critical bridge between investors and capital markets, it’s extremely important that the funds industry keeps pace with broader changes in financial services infrastructure.

“The move to T+2 for funds will encourage greater global alignment on settlement cycles, enabling better services for investors, fostering a more robust financial ecosystem and improving the competitiveness of UK and European funds. We encourage firms, their service providers and the wider distribution chain to kickstart preparations for T+2, focusing on the delivery date to ensure a smooth transition.”

Liz Field, Chief Executive of the Personal Investment Management and Financial Advice Association, commented:

“PIMFA and its members support the reduction of the settlement cycle for UK funds transactions to T+2. This is an important step towards greater global alignment on settlement cycles, which will foster a more robust financial ecosystem, drive economic growth, increase investor confidence and improve the competitiveness of UK markets.”

Jack Inglis, CEO of the Alternative Investment Management Association, commented:

“AIMA welcomes the UK Accelerated Settlement Taskforce's (AST) roadmap for transitioning to a T+1 securities settlement cycle by 11 October 2027. We are committed to working with the industry to implement the necessary changes to ensure a smooth transition.

In line with the AST’s recommendations, AIMA is actively supporting firms with the global shift towards shorter securities settlement cycles. This transition will contribute to a more efficient and competitive financial ecosystem, benefiting market participants and investors alike.”

Andrew Douglas, Chair of the Government’s Accelerated Settlement Taskforce commented:

“As chair of the Accelerated Settlement Taskforce (AST), on behalf of the AST, I wholeheartedly welcome and support this recommendation from IA, PIMFA and AIMA. It fully aligns with the industry's February 2025 T+1 Implementation plan, specifically ENV 11,  both on content and the required deadline. I would encourage all participants to adopt it as part of their preparation for the implementation of UK T+1 on 11th October 2027.”

Separately, the IA has provided its members with a list of considerations for fund managers, providing a framework for co-ordinated action by firms who wish to mitigate challenges presented by the market change. 

Notes to Editor

There is a general trend towards quicker settlement within the global capital markets. The US move to T+1 in May 2024 has been the largest market to switch from a T+2 settlement timing to T+1, and the UK and EU markets have separately announced their intentions to do the same on 11 October 2027.

The UK Accelerated Settlement Taskforce’s (AST) recent report included a recommendation that investment funds should – at or before 11 October 2027 – move to a T+2 settlement cycle. The recommendation was targeted at the funds industry, with the IA, PIMFA and AIMA, along with the AST, named as the responsible parties to take it forward given their roles across the sector.

Funds typically seek to apply a one-day settlement lag to provide some cash management flexibility in investing in an array of global securities and products, whilst minimising a potential funding gap and associated costs. There is currently no standard settlement timing for UK funds, with a range in place between T0 and T+4, with the most common timing at T+3.

The IA, PIMFA & AIMA have been working with the AST, the FCA, the wider funds ecosystem including platforms and transfer agents, and peers in other jurisdictions for European domiciled funds, to assess the impact of the planned changes.

The IA made a similar recommendation in 2014 for funds in alignment with market changes in most of Europe to T+2.