Financial research consultancy The ValueExchange has released a report titled “T+1 in Asia Pacific: Finding a common ground”. The paper looks at what the current preparations for a shorter settlement cycle looks like in APAC, and the areas that still require alignment before T+1 can become a reality in the region.
The report was produced together with the Depository Trust and Clearing Corporation (DTCC), fintech firm Fidelity Information Services (FIS), Nasdaq, Standard Chartered, and Swift. 244 firms from around the world took part, representing investors, brokers, custodians, market operators, and service providers. 35 per cent of respondents were from APAC.
Most APAC markets appear to be targeting 2028 as the deadline for T+1 – nine markets indicated so, including Australia, Hong Kong, Japan, and Singapore. Three markets – Indonesia, Philippines, and Vietnam – indicated 2029 as their deadline.
In the game
74 per cent of respondents are actively engaged in preparations for APAC’s T+1 transition. Of this, 67 per cent are doing research, while three per cent already have funded projects and four per cent have projects planned for 2026. From these numbers, the readiness level appears higher than for the transitions in the UK and US. 26 months prior to the US transition in 2024, only 41 per cent of firms had reached the research stage while 30 months before the transition in the UK, which will happen in October 2027, the figure was 57 per cent.
Speed is essential
The report found that 70 per cent of APAC’s settlement instructions will need to be accelerated to make T+1 a reality. In The ValueExchange’s “Path to 2030” study published in June this year, 61 per cent of securities processing platforms in APAC are “in need of remedial attention” and “underperforming in a T+2 world”. The report writes that these platforms therefore have “little hope of facilitating an 80 per cent acceleration in settlement processing”, which would be required under T+1.
Custodians are worried
Investors appear to be the most optimistic about the impact of T+1 and indicated an expectation that it would lead to a 10 per cent improvement in overall fund performance, improved investor access, and lower long-term operating costs. Custodians are much less optimistic. The risk of increased trade fails tops their worry list while 20 per cent of them expect at least a 25 per cent increase in errors.
Up front
83 per cent of respondents cited funding mismatches as “the single most significant risk in APAC’s frontier markets” – frontier markets within this study being Pakistan, Philippines, and Vietnam. Asia’s markets are diverse. Currency restrictions, tight local bank deadlines, and the fact that many currencies in the region are not eligible for CLS come together to create an “unparalleled” FX and liquidity challenge. T+0 FX is thus “a core prerequisite for success, rather than a desirable feature”.
Smooth operators
When asked about the enablers required to ensure a smooth transition to T+1 in APAC, an overwhelming 88 per cent of respondents stressed the importance of having major FX currencies available on a T+0 basis. 84 per cent believe that the automation of standard settlement instructions (SSI) set-ups and maintenance will help. The same percentage wants to see automation in the pre-settlement matching of allocations and confirmations on T+0. Removal of manual processes and real-time visibility of trade status shared the third spot with 81 per cent.
A unique region
The paper concludes, “The journey toward T+1 settlement in Asia-Pacific is not a simple repetition of previous transitions. It is a unique challenge defined by structural complexity and inherent fragmentation, across a region that has no unifying bodies or coordinators.” It suggests that a collaborative, regional toolkit might be essential. Critical enablers, such as T+0 FX, automated SSI, and pre-settlement matching “must be prioritised and delivered by each of the region’s market authorities and infrastructures”.
