Under the new T+1 regime in the US, 95 per cent of transactions are affirmed on the trade date itself, a marked improvement on the 73 per cent rate recorded in January 2024. The settlement “fail rate” was just 2 per cent — consistent with the figure under T+2. Margin posted in the clearing fund fell by $3bn a day, a 23 per cent drop from previous three-month averages, freeing up $750bn annually for broker-dealers to use elsewhere. These results showcase how a shorter settlement cycle creates a more efficient, resilient market. European investors deserve these same advantages. Adopting T+1 will strengthen European capital markets, and reduced counterparty risk is a central reason why. Currently, the two-day gap between trade execution and settlement creates the risk that a counterparty could default before a trade is finalised.

https://www.ft.com/content/746570ba-3933-4a59-a2d4-120c89281165