Why T+1 settlement is a wake

The UK’s shift to T+1 settlement on 11 October 2027 will see in-scope securities trades settle one business day after the trade date instead of two. According to RegTech firm Cascade, while the FCA frames the move as a route to more efficient, lower-risk markets, the change carries a less obvious consequence for UK Alternative Investment Fund Managers: compressed operational timelines that will test the resilience of AML frameworks. T+1 is not a new AML rule, Cascade notes, but it squeezes the time available for investor onboarding, beneficial ownership checks, sanctions and PEP screening, source of funds reviews and exception handling. The practical question for AIFMs running hedge funds, private credit, real estate, private equity or multi-asset strategies is whether their AML controls can operate at the speed their trading and investor operations will soon demand. HM Treasury intends to legislate for T+1 as the standard UK settlement cycle under UK CSDR from October 2027. The FCA expects firms to have completed project plans, secured budget, made system changes and be ready to test by the end of 2026, warning it may act to protect market integrity if firms fall behind. AML obligations, meanwhile, remain rooted in the Money Laundering Regulations 2017, the Proceeds of Crime Act 2002 and the Terrorism Act 2000, with SYSC 6.3 requiring proportionate systems and controls. The FCA’s 2025 portfolio letter also flagged financial crime risks tied to private assets and complex ownership structures. Cascade highlights four pressures for AML teams: earlier completion of onboarding, cleaner data at source, faster alert handling, and stronger management information for MLROs and senior managers. Exposure varies by model. Private markets firms face layered structures demanding deeper UBO analysis, hedge funds sit closest to the direct trading impact, and real estate funds may still feel treasury and settlement effects. Cascade’s AML SaaS platform can support this shift by centralising investor data, KYC workflows, CDD, beneficial ownership mapping, screening and risk scoring. For AIFMs preparing for T+1, Cascade could help reduce spreadsheet-based files, track missing documents, apply consistent risk ratings and give MLROs and boards audit-ready oversight. For more, read the full story here. Copyright © 2026 FinTech Global