The European Fund and Asset Managers Association (EFAMA) has issued a clear call for asset managers – particularly smaller and less‑automated firms – to come forward and articulate the challenges they face in preparing for T+1, following the publication of the joint UK–EU-CH T+1 Testing Strategy.
Speaking on the industry panel, Susan Yavari, senior regulatory policy adviser at EFAMA, said the buy side must be more vocal as the transition accelerates.
“I would love to hear more from the smaller asset managers and truly understand the challenges that they’re facing,” she said.
Her comments follow ValueExchange survey findings showing asset managers at the lowest end of the automation spectrum, with many still reliant on manual processes. Yavari warned that this gap – between highly automated global managers and firms without matching engines or straight‑through processing – poses a material risk to the ecosystem.
She stressed that the new testing plan is “highly readable, highly actionable” but that the buy side must now confront the breadth of operational change coming through the RTS, the high‑level roadmap, and new requirements around SFT gating, partial settlement, and more granular SSIs.
“If we fail to do that, there’s an impact on our cash management, cash forecasting, and ultimately our settlement fails,” she said.
A fundamental shift: “No one solves this in isolation”
The panel opened by framing T+1 as a fundamental reshaping of how the industry operates, not a technical uplift.
“It’s a fundamental shift in how our industry operates… No one solves this in isolation,” the moderator noted.
Speakers emphasised that the move compresses timelines, demands tighter coordination, and requires end‑to‑end connectivity across the trade lifecycle. The joint UK–EU testing plan itself is a symbol of that coordination.
Why a joint testing strategy? Post‑trade is the real challenge
Euroclear’s Charlie Pugh, representing the UK CSD perspective, explained that the decision to produce a single testing plan was driven by the reality that the real challenge is post‑trade, not settlement mechanics.
“This change has very little to do with settlement. It has a lot to do with everything that happens post‑trade,” he said.
He noted that while the DTCC’s 2024 T+1 testing plan provided a benchmark, Europe’s complexity – 26–27 markets, multiple CCPs and CSDs – made a unified approach essential. “Citibank came out with the metrics that you’re losing 80% of your processing time moving from T+2 to T+1… You’ve got to do what you do in two days in basically 20% of the operational time.”
Separate regional test plans would have created duplication and misalignment; a single plan allows firms to test across markets simultaneously.
What gap does the strategy fill? Visibility and readiness metrics
BNP Paribas’ James Maher highlighted that the testing plan fills a long‑standing coordination gap by providing end‑to‑end visibility on who tests what, when, and under which conditions. “The report aims to provide end‑to‑end visibility… and to produce readiness metrics which were measurable across the community,” he said.
Common metrics are intended to help firms de‑risk their transition and benchmark their progress. “It’s an iceberg”: Why 2026—not 2027—must be the industry’s focus
Euroclear’s Ivan Nicora delivered one of the session’s starkest warnings: the industry is underestimating both the scale and timing of the work. “What you see is only a little piece of it… It’s not about optimising, it’s about reshaping,” he said.
He reminded the audience that: T+1 go‑live is October 2027, but the new T2S operational day begins mid‑June 2027, and ESMA’s proposed 11 p.m. affirmation deadline hits December 2026. “Anyone believing that working to be ready by October 2027 is taking substantial risk… Time is of essence.”
Flexibility: Firms must own their internal testing
Pugh stressed that the testing plan is deliberately non‑prescriptive. “The point of the report is to empower you… You’ve got to take responsibility for understanding the changes in your business,” he said.
Internal testing can – and should – begin now, long before the coordinated market‑wide windows in 2027. A live poll during the session showed: 57% expect to complete automation and system changes in 2027 and 36% in 2026. Nicora urged firms to shift as much work as possible into 2026 so that 2027 can be dedicated to coordinated testing.
Structural differences: UK vs EU
Pugh noted that the UK’s scope is narrower – gilts already settle T+1 – so the UK is focused primarily on equities. Completing UK CSD changes early will free firms to focus on the EU’s broader transformation.
Maher highlighted two major EU changes requiring early preparation: a new pause in the T2S night‑time cycle after midnight to allow more settlement overnight; a new CSD‑driven gating event at 11:00 to net, match, and increase liquidity on flagged transactions
Both require new SWIFT flags and testing in 2026–27.
What should firms prioritise now?
Yavari pointed to several immediate priorities: new custodian cut‑offs; smaller custodians may close as early as 21:00–22:00, creating operational pressure for outsourced buy‑side models; SSIs and PSET/PSAFE fields; more communication is needed to the buy side on new data requirements, fund settlement cycles (many managers are shortening cycles – this may clash with testing windows); and selective bilateral testing in 2026 with custodians and intermediaries.
