T+1 settlement: Clearing and settlement solutions

The shift to T+1 trade settlement has significant implications for investment managers and the finance industry. Finding the right partner is crucial to help ensure readiness, manage risk, and avoid failed settlements.

Featured solutions

We’re well-positioned to support your shift to T+1 by offering a range of advanced services:

Global custody

Custody is at the core of what we do. Our integrated custody services offer a differentiated approach, providing scale, proactive client engagement, and a singular focus on driving technology innovation and continuous improvement. We leverage the knowledge we’ve gained from our enterprise T+1 program and engagement within industry working groups, sharing best practices for infrastructure, testing, conversion planning, and support for the standardization of processes.

Foreign exchange

Our StreetFX^®and Indirect FX products can help investment managers address the risks and challenges associated with T+1 foreign exchange (FX) processing. Our rules-based FX service enables investment managers to define their FX execution strategy and completely automate the FX trade execution lifecycle.

Electronic Trading Platforms

Our suite of technology solutions offers investment managers the ability to execute trades and process post-trade confirmations across multiple banks in a seamless and timely manner. TradeNeXus^SM offers best-in-class execution, allocation and automation features that allow you to streamline your trading workflows, accelerating confirmation, and settlement time.

Post-trade and settlement

Our post-trade solution supports the automated, straight-through workflows needed for a smooth transition to T+1. We offer centralized, post-trade processing with real-time, enterprise-wide visibility with end-to-end confirmation, reconciliation, and settlement workflows.

Partnered trading

In the absence of a trading desk, investors who rely solely on local trade processing resources should consider the ability of their existing infrastructure to support the new workflows required for trading securities in a T+1 environment. Identifying gaps in the process (and how to address them) will come down to the available resources to address these as the global transition to T+1 continues. Alternatively, investors can look to partner with external providers that are already set up to meet these requirements.

Secured fund financing

For managers transacting across jurisdictions, shortened USD settlement cycles in comparison to other currencies and jurisdictions may present funding gaps that could trigger overdrafts. With a T+1 funding facility through our secured fund financing solution, managers can pledge assets from their State Street custody account to access cash that helps meet funding gaps at flexible terms. Securities can be rehypothecated through our agency lending solution, a transparent and low-risk alternative to traditional rehypothecation that helps make the overall facility pricing more competitive than a traditional leverage line.

ETF servicing

Managing ETFs in a T+1 environment requires a controlled, automated, and expedited solution built to accommodate the nuances of ETF investments. Our solution supports the entire life cycle from point-of-order via Fund Connect^®, to basket processing and primary market settlement through our ETF Global Platform.

T+1: Europe in focus

Europe’s transition to T+1 is likely to be more complex due to fragmented infrastructure and regulations. In a recent conversation with Global Custodian, Dan Hickey, our global head of Custody Product and Network Management, shares how T+1 in Europe reshapes settlement, automation, and funding challenges, and what investors must do to stay prepared.

View the transcript

For me, first of all, we've got to acknowledge the difference between the US transition to T+1 and Europe. We've got to acknowledge that significant fragmentation exists across the European market infrastructure.

There are different CSDs, CCPs, and legal regimes, and that all needs to be taken into consideration as we look at our client base and how we help them through this.

I think custodians are going to be central in orchestrating that T+1 change for our client base. The kind of things that we're really thinking about at State Street is how we improve automation, because we are reducing the timeframe within which settlement can take place. The overnight cycle that we're all so reliant on within Europe, and that ability to do exception management, just won't be there.

So for us, there's a real focus on working with our clients on automation, real-time exception management, the cleaning up of SSIs and counterparty behavior — driving behavioral change across the industry.

One of the key things in State Street’s approach is getting feedback and understanding from our clients — their expectations of us and what they need to enable them to make risk-based decisions within the compressed T+1 timeframe. At the same time, we’re working with our peer banks to try and get this right as an industry.

We strongly believe in the collective good here. T+1 shouldn’t be a competitive advantage — the whole industry needs to succeed. If one party doesn’t achieve it, we risk letting all clients down collectively.

T+1 fundamentally compresses FX and funding timelines, and that’s going to bring significant complexity for cross-border investors. They will have to settle FX much earlier in the post-trade lifecycle.

They will need to think differently about funding requirements, as they won’t be able to rely on funding on the morning of T+1. In some cases, funding will need to be in place even before FX execution, which may require pre-funding and create liquidity challenges.

Custodians can help address this through integrated custody workflows with FX solutions. Auto FX has been highlighted in industry papers as one way of managing these challenges. For cross-border investors — for example those operating in APAC — outsourcing this activity to a custodian can be an effective option.

Reporting is also critical. At State Street, we’ve invested in intraday liquidity reporting so that clients understand their positions and can take action within the necessary timeframe.

However, it will be challenging. FX timelines will be significantly compressed, and the opportunity to fund CLS on T+1 will also be reduced compared to today.

This makes it essential to work closely with your custodian to find the right solution, ensuring integrated custody and FX workflows supported by near real-time liquidity reporting.

From State Street’s perspective, we are asking clients to review any manual processes they currently rely on. We want to see increased levels of STP and automation across our client base.

Any manual process becomes a potential failure point under T+1, so addressing these is critical. Alongside this, clients should review FX and funding workflows to ensure they can operate in a near real-time environment.

This is particularly important for cross-border clients, who will need to fully understand the compressed timelines they will be operating in.

We also encourage clients to carry out operational mapping — aligning existing processes to new deadlines, identifying gaps, and working with us to close them.

Counterparty outreach and collaboration with your custodian are absolutely essential. At State Street, we are also engaging clients through surveys to better understand their needs in the T+1 environment.

Another critical element is early testing. Preparation in 2026 and early testing will be key to achieving successful execution in 2027.

Based on our engagement with clients, those who actively focus on automation, STP rates, and funding models will not only be better prepared for T+1, but will also build more resilient post-trade processes and realise benefits beyond the settlement cycle change.

Answers to your questions

By the numbers

US$54.5T

in assets under custody and/or administration^*

100+

markets where we can support your growth

US$2B

annual investment in technology development

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T+1 settlement: Clearing and settlement solutions

Featured solutions

T+1: Europe in focus

By the numbers

For more information