In a significant move towards modernizing the financial infrastructure, Switzerland and Liechtenstein are set to transition to a T+1 settlement cycle on October 11, 2027. This initiative aligns with similar changes in the European Union and the United Kingdom, contributing to a broader global trend that aims to enhance efficiency in financial transactions.
The Swiss Securities Post-Trade Council (swissSPTC) recently published its recommendations designed to facilitate this transition. This comprehensive approach involved insights from over twenty key participants within the financial sectors of both countries and is geared towards ensuring a smooth and effective implementation.
The decision to move from the current T+2 settlement cycle to T+1 is strategic, aiming to minimize counterparty risk, improve liquidity, and strengthen overall market stability. It follows North America’s successful shift to T+1 in 2024, highlighting the importance of international standards in financial markets. The transition underscores both nations’ commitment to maintaining global competitiveness and fostering resilience in their financial systems.
In preparation for the change, swissSPTC has organized a T+1 Task Force, which is focused on guiding the financial markets through this essential evolution. Their recommendations stemmed from an in-depth analysis that scrutinized various operational processes, international harmonization, liquidity management, and legal considerations. This multifaceted approach also considered lessons learned from similar transitions in North America, ensuring that potential pitfalls are effectively addressed.
The initiative consists of six dedicated workstreams that cover all aspects necessary for a successful transition. These workstreams encourage collaboration across different sectors, including trading entities, clearing houses, banks, issuers, and relevant industry associations. All stakeholders have been kept in the loop, ensuring that regulatory and supervisory authorities are well-informed throughout the process.
The recommendations provided by swissSPTC are intended to be adaptable. They are deemed living guidance that can evolve if significant changes in market conditions or regulatory landscapes arise before the implementation date. This flexible approach is critical in ensuring the readiness of the market to embrace the new standards by the set deadline.
The framework aims to cover transferable securities that are executed on Swiss trading platforms and settled via the Swiss central securities depository (CSD), SIX SIS. As part of the transition support, swissSPTC has initiated a market consultation, which is presently open till October 10, 2025. This consultation is intended for industry participants to share their feedback and insights regarding the T+1 transition.
Further, to facilitate clear communication regarding the transition plans, swissSPTC will present its findings and outline implementation strategies at a forthcoming event organized in partnership with the financial market infrastructure provider. This plan solidifies the collaborative effort among market players and the regulatory framework to ensure successful adoption of the new settlement standard.
Overall, the impending move to T+1 reflects a strong commitment from Switzerland and Liechtenstein to align with global best practices, enhancing market efficiency and stability. The collective efforts of the swisSPTC and financial institutions indicate a proactive stance in navigating the complexities of financial market modernization, ensuring that the transition not only meets current needs but is also equipped to adapt to future challenges in the financial landscape.