T+1 Settlement

Transactions in shares are subject to a settlement cycle, known as trade settlement. This process allows the smooth exchange of securities between the trading parties. At the end of May 2024, the stock exchanges in the USA, Canada and Mexico will shorten this settlement cycle from the current two days (T+2) to just one day (T+1).

China, for its part, has already switched this settlement cycle to T+0 for equities and T+1 for cash. India's stock exchanges have also switched to T+1.

In the EU, the UK and Switzerland, discussions on the introduction of T+1 are ongoing.

The switch of the North American stock exchanges to T+1 will have an impact on the European and Swiss markets. A shortened settlement cycle on T+1 is expected to bring advantages such as a reduction in systemic risks (liquidity, counterparty) vis-à-vis clearing houses and other market participants.

Nevertheless, the change will present asset managers and investors in Switzerland with logistical and technical challenges. Swiss asset managers and fund providers currently must assess the potential impact on their collective investment schemes themselves and prepare for technological, behavioral and operational changes.

The Asset Management Association Switzerland (AMAS) is closely following the topic of "Settlement Cycle T+1". The circular "Settlement T+1" with more detailed information can be found in the circular,

For competitive reasons, AMAS is endeavoring to shorten the settlement cycle to T+1 in Switzerland as well and believes it makes sense to pursue a joint solution with the EU and the UK. The corresponding discussions with the EU are being coordinated via the Swiss Finance Council in Brussels, of which AMAS is a member.

Circular 04/2023

«Settlement T+1»