29-05-2025
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.
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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.
The IA made a similar recommendation in 2014 for funds in alignment with market changes in most of Europe to T+2.
