T+0: The leap, the logic and the limits

DEEP LOOK | As the industry races into T+1, the debate over same‑day settlement exposes a deeper tension: operational readiness versus the promise of real‑time markets. In this second part of our two‑part series on T+0, experts offer a grounded reality check.

The Deloitte Center for Regulatory Strategy’s 2026 capital markets regulatory outlook noted the willingness of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to discuss enhancements to faster settlement and that SEC chair Paul Atkins has been particularly vocal about exploring opportunities for T+0.

But within the securities services industry, many feel that only when the market is comfortable with T+1 can a proper assessment of T+0 take place. Others go further, suggesting that there isn’t a compelling case for committing to same day settlement.

Challenges versus benefits

Mack Gill, head of securities processing at FIS reckons conventional wisdom is that the challenges of T+0 outweigh the benefits, although he cautions that this is based on the assumption of existing models and infrastructure.

Gill believes that as the industry invests further in modernising towards real-time architecture and as DLT markets gain more flow, a fundamental shift will occur as many of the existing challenges disappear and the benefits become self-evident.

Even small improvements in settlement have a meaningful, tangible impact on balance sheet, counterparty credit and operational risk, so in that sense the benefits of T+0 could be substantial. Where opinion is divided is around how to achieve it without unnecessarily increasing complexity while maintaining resiliency in market infrastructure.

According to Vikash Rughani, head of product design at OSTTRA, the benefits will only come to fruition if the move is coordinated, interoperable and phased in line with industry feedback and regulatory support. Fragmented or rushed adoption risks overcomplicating existing workflows by adding even more moving parts.

Is there really demand for T+0?

In practice, investors have the ability to request T+0 settlement from their brokers in the existing market framework. The fact that most do not suggests that investors are not significantly pushing for T+0 settlement as a value-add to their operating models.

However, Gary O’Brien, head of bank and broker segment strategy, Securities Services at BNP Paribas acknowledges that some transactions already settle ‘irregularly’ on a same day basis.

“What this indicates is that there are some scenarios – perhaps to fund activity in other markets or asset classes – where investors benefit from T+0 settlement,” he says. “This suggests that for investors, the greater value is in optionality of settlement, in keeping with their specific needs and wider trading profile.”

Chris Rowland, head of custody, digital and fund services product at State Street reckons the innovations already evident in decentralised finance operations demonstrate the advantages of a more efficient settlement cycle.

“From an operational perspective, T+0 enables better accuracy on NAVs and completeness of record, with greater real-time reflection of fund holdings and improved intra-day pricing,” he says. “This in turn supports enhanced reporting capabilities, providing greater transparency and visibility for both clients and regulators. For corporate actions specifically, real-time settlement reduces ambiguity around holders at record date, minimising the risk of errors and claims.”

In terms of trading, Tom Casteleyn, EMEA head of custody at JP Morgan reckons a move to T+0 could more closely align with retail investment activity on the basis that retail investors currently have to pre-fund their transactions and then have to wait for settlement if they wish to withdraw their funds.

Why many believe T+0 is a step too far

An alternate view is that T+0 comes with as many pitfalls and additional costs as the current system. With the move to T+1 globally under way, the narrative that securities settlement systems are inefficient isn’t true and the vast majority of global trading is ‘buy to hold’ not high frequency so the ecosystem should be calibrated for the many, not the few.

So says Adrian Whelan, global head of market intelligence at Brown Brothers Harriman, who notes that the possibility of moving to T+0 or real-time settlement was considered within US T+1 planning. “It was broadly concluded that the change would be too complex and that an iterative approach to shortening settlement cycles was more pragmatic,” he says. “The DTCC noted at the time that real-time settlement would result in the loss of significant investor benefits to liquidity and risk mitigation that the T+1 netting processes allows.”

Whelan also alludes to concerns that the most vocal proponents of T+0 don’t currently manage a large volume of global trading and that it could encourage more short-term overtrading, leading to increased volatility, increased risk and heightened possibility of market manipulation.

Liquidity, netting and the risk of market consolidation

Phil Flood, global business development director for regulatory and STP services at Gresham agrees that T+0 would likely to shift competitive advantage toward larger firms with deeper balance sheets, more advanced technology and stronger real-time liquidity management capabilities who would be better positioned to absorb the costs and operational demands of same day settlement.

“Smaller firms, by contrast, currently rely on the settlement window to source securities, arrange financing, aggregate positions and optimise capital usage,” he says. “This operational flexibility has real economic value that would largely disappear under T+0. T+0 could also result in market consolidation, reduced competition or barriers to entry which would harm markets even though settlement risk would be lower.”

24/5 trading: Parallel trend, not a prerequisite

As for whether same day settlement aligns with the move to 24/5 trading that market infrastructures are planning for, Gill describes these initiatives as stemming from the same desire to advance capital markets infrastructure towards a more dynamic, real-time financial markets ecosystem, offering democratisation of access and much greater efficiency. “Extended trading hours will drive the continued move towards accelerated settlement cycles, though both trends stand on their own merits,” he adds.

T+0 requires high levels of automation and connectivity and 24/5 trading at scale requires the same dynamics says Duncan Carpenter, head of securities lending post trade at Pirum. “We have also seen ISLA’s new CEO indicate that firms should already be optimising resources as the industry looks towards 24/7 borderless trading,” he adds. “Moreover, these dynamics are the key to unlocking the transformative and competitive benefits offered by AI, large language models and machine learning.”

While acknowledging the alignment between T+0 and 24/5 trading, Jennifer Nolan, middle office product manager at Apex Group says managers and service providers have to recognise the challenges this will pose for operations teams.

Automation, compression and the operational reality

Operationally, firms cannot run always-on markets with post-trade workflows that still depend on end of day cut-offs and people chasing emails, agrees James Pike, chief revenue officer Taskize. “Continuous trading requires continuous readiness and that means automation and real-time exception handling become non-negotiable,” he adds. “T+0 can reduce counterparty risk, but it can also shift risk into operations if firms are still relying on manual processes.”

Exchanges can set cut-off times to define the end of a trading day – meaning T+0 settlement is technically feasible within a 24/5 environment – but aligning both presents some challenges according to Daniel Carpenter, CEO of Meritsoft, who notes that operational workflows would have to be upgraded to compress key post-trade processes such as allocation, affirmation and reconciliation into a much shorter timeframe.

Round-the-clock trading highlights the need for more resilient and automated systems at the execution level, suggests Francisco Béjar, head of custody at SIX. “T+0 requires real-time readiness across clearing, settlement, liquidity management and risk controls, including interoperability between CSDs and harmonised cut-off practices. T+0 could happen without markets going to 24-hours and likewise, 24-hour trading can work without real-time settlement.”

The discussion around 24-hour trading has mostly been around the execution of trades and there are still a lot of unanswered questions on its impact for post-trade processes, suggests Rughani.

Intraday liquidity: The real driver behind 24/5

“Crucially, the need for intraday liquidity is driving the 24/5 debate and T+0 is not essential for listed products,” he adds. “Firms will look to execute and settle intraday repo or FX swaps where settlement of the near leg and far legs will occur at specific time(s) on the same day. This provides large savings in funding cost and balance sheet usage for both parties involved in the transaction.”

Institutional investors will often act based on a ‘trade date’ view of their portfolio; assuming trades will settle on the expected settlement date and so funds or units will be available for further sales. Most markets do not require parties to have firm positions sitting in their accounts before they can sell them.

As such, T+0 does not necessarily improve the ability of a market to implement 24/5 trading, suggests O’Brien. “What is more key is to maintain or enhance the settlement rate of trading activity, regardless of the settlement cycle to ensure that assets and cash are available at the time required and as intended by the institution’s trading approach.”

Strategically, T+0 and 24/5 trading are aligned in that both reflect a shift toward more continuous, globally accessible markets, acknowledges Danny Green, head of international post-trade solutions at Broadridge.

“In practice, extended trading exposes the limitations of existing post‑trade models,” he continues. “Overnight execution combined with batch‑based processing can push risk backward rather than reduce it; trades executed after traditional cut-offs may not be reflected in positions, balances or risk until the next business day; and supervision, reporting and reconciliation models designed around ‘end of day’ become strained.”

DLT as the potential leapfrog

Kamel Torki, global lead for T+1 initiative at CACEIS instead refers to the potential upside from leveraging a new architecture based on digital ledger technologies like blockchain for all post-trade activities rather than going the route of trying to upgrade traditional settlement processes with complex additional IT systems.

Rowland also refers to growing interest in blockchain and distributed ledger technology as alternatives to traditional platforms, which could help bridge the gap between traditional finance and the digital assets ecosystem.

The core question: Is T+0 still linear progress?

One perspective is that T+0 no longer represents linear optimisation in the settlement cycle. Unlike previous reductions in settlement timelines, the elimination of overnight processing buffers raises the question of whether the incremental reduction in counterparty and credit risk would justify the substantial infrastructure investment required.

The significant operational and technology costs associated with achieving true same-day settlement have fuelled the discussion over whether distributed ledger technology could effectively leapfrog the traditional path to T+0, suggests Pam Samrai, global head, buy-side post trade product at Bloomberg.

“Some market participants argue that rather than retrofitting legacy infrastructure to accommodate compressed settlement cycles, capital may be better deployed toward next generation market infrastructure built natively on real-time, atomic settlement models,” she concludes.