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Shorter Cycles, Higher Stakes: Corporate Actions in a T+1 World
KEY HIGHLIGHTS
- The upcoming T+1 settlement cycle will shrink the grace period for corporate action instructions from 15 hours to just five, potentially reducing post-trade processing times by a staggering 83%
- Europe's readiness for T+1 is hampered by a major automation gap, with brokers lagging at a mere 14% automation rate, creating significant risk from reliance on manual processes
- Europe's T+1 transition faces a unique and complex challenge compared to the US, as it must harmonize corporate actions across 32 different legal jurisdictions and 40 central securities depositories
T+1 is set to roll out across most markets in Europe on October 11, 2027, and will touch almost every aspect of the post-trade value chain from allocations, matching and confirmations through to clearing and settlement. Corporate actions will not be spared. As the deadline for compliance draws closer, the industry is working hard to align its corporate action practices with the shorter settlement cycle.
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