T+1 in Asia: There is no one-size-fits-all — that’s the advantage
03 March 2026
Roy Zimmerhansl, head of Capital Markets at WTS Hansuke, provides a deep dive into Asia’s journey to T+1, what is required for success, and why the region’s move to a shorter settlement cycle will stand separately to that of the US and Europe
Image: Roy Zimmerhansl
Asia’s path to T+1 will not mirror the US cadence or Europe’s planned 2027 transition. In Asia, markets move for their own reasons: national priorities, regulatory philosophy, market-structure legacies, and the practical realities of funding, FX, and settlement infrastructure. Having lived and worked in Hong Kong, I have seen that up close. What motivates Japan is not what motivates South Korea; what suits Singapore may not work for Thailand or Malaysia. The region’s diversity is intentional.
That is why importing a universal playbook will fail. The right approach is to anchor a coherent framework in each market’s imperatives, so lenders, borrowers, custodians, brokers, and asset owners can operate locally and cross-border without creating liquidity friction.
Our experience leading T+1 work across the UK and Europe is relevant, not because those initiatives are complete, but because the process works. Industry experts have been in the room from day one; securities finance has been part of the design, not an afterthought. The value lies in that precision, the specificity of the guidance, and the discipline of aligning recommendations with what firms can actually implement.
Why fragmentation bites harder in Asia
T+1 tightens every screw in the post-trade chain. When a portfolio manager trades US equities on T+1 and then turns to European and Asian allocations still on T+2, the costs of misalignment appear immediately. Funding windows narrow; intraday visibility becomes critical; collateral mobility slows if processes are not tuned for compressed returns and recalls. In Asia’s varied environment, those frictions do not just add up — they compound.
For securities finance, the picture is even more textured. Differences in central securities depository (CSD) functionality, market holidays, settlement discipline, tax treatment, and attitudes to short selling shape what is possible on day one of any local T+1 shift. A single template will not survive contact with those constraints. The better approach is to recognise what is unique in each market, while introducing enough common practice to avoid unnecessary fails and funding drag across the region.
What Europe and the UK really teach us
The lesson from UK and European workstreams are not the plans themselves, it is how they were built. Practitioners led the process, pulling securities finance into the centre of the discussion early. That ensured recalls, returns, partial settlement, standard settlement instructions (SSIs), inventory views, and collateral flows were part of the core design. Many recommendations from the EU securities financing transaction (SFT) workstreams now sit inside other workstreams because SFTs are integral to market functioning.
Equally important, the guidance has been lifecycle-specific, not slogan-driven. Trading, allocation, affirmation, matching, settlement, and fail remediation have been treated as a single journey. Recommendations have been tied to existing best-practice frameworks, enabling firms to act without reinventing operating models.
Asia can adopt the method — industry-led, SFT-embedded, lifecycle-specific, standards-aligned — without repeating the full learning curve.
Technology is the deciding factor
T+1 is a data and automation challenge wrapped in process and culture. Every acceleration has coincided with meaningful automation; where automation lags, settlement friction rises. Where it advances, volumes scale and operational risk falls.
Four realities shape Asia’s path: first, end-to-end automation is essential. Straight-through processing from execution through affirmation and settlement is foundational; for SFTs, automation must cover borrowing, returns, recalls, and reconciliations.
Second, automated partial settlement and shaping must be adopted, not just offered.
Third, real-time visibility into inventory, cash and collateral is critical. End-of-day reconciliation belongs to a T+2 world.
Finally — and uniquely for Asia — FX settlement cut-offs define the art of the possible. In markets with restricted convertibility or narrow windows, T+1 compresses timelines to the point where good SFT processes cannot compensate for challenging FX plumbing. A credible roadmap must place the securities-FX handshake at the centre. If the cash leg fails, the stock leg is irrelevant.
The overlooked risk: When core functions sit outside the lending ecosystem
Beneficial owners often access lending through fund managers outside the securities lending ecosystem. Portfolio managers, execution desks, FX teams, fund operations, agent lenders, and custodians may sit in different organisations, time zones, and incentive structures. Under T+1, that fragmentation magnifies risk.
A late-day Hong Kong trade executed by one team, allocated elsewhere, with FX handled under a separate policy, and recalls managed without visibility, creates timing conflicts that erode revenue and heighten settlement risk. The beneficial owner ends up asking the wrong question: ‘Why did the loan fail?’ instead of ‘Where did the operating model create the break?’
The fix is coordination: portfolio managers need timely sight of loaned positions and expeditious order routing; lending desks need visibility into trading intent and automated recall capability; borrowers must automate returns and deliver them on a timely basis; FX must be integrated with securities flows. Firms solving these issues in the UK and Europe are best placed to assist as Asian markets evolve.
Where trade associations fit — and where they don’t
Trade associations were not just helpful in the UK/EU effort; they were indispensable. The securities finance design would not have taken shape without the International Securities Lending Association (ISLA) and the International Capital Market Association’s (ICMA’s) ability to rally expertise and keep SFTs central. The Pan Asia Securities Lending Association (PASLA) can play the same crucial role in Asia, not by driving the change, but by creating the environment in which the industry’s best ideas can surface, align, and be executed.
Associations convene, coordinate, and communicate. They give the industry a voice and help convert technical insight into guidance. But they do not build operating models or resolve workflow conflicts. Their strength is elevating the signal and reducing duplication; the heavy lifting — sequencing change, wiring data, fixing recalls and returns, tuning FX hand-offs — belongs to practitioners.
What Asia needs next
A credible path to T+1 starts with market-specific diagnostics: what settles automatically today? Where do recalls and returns fail? Which CSD capabilities exist but are under-used? Which needs investment?
Next, cross-ecosystem alignment: portfolio managers, FX, fund operations, custodians, and agent lenders must share timing assumptions and map them out rather than hope everything will align on settlement date.
Then, market-by-market playbooks. Each market needs a practical sequence grounded in its own infrastructure and rules. That playbook must be technology-led: auto-partialling where available; harmonised SSIs; cleaner static data; real-time views; recall/return frameworks that work under compressed cut-offs; explicit solutions for the FX leg.
The goal is not to make Asia look like Europe, it is to let each market move at its own pace without creating friction for cross-border investors, and without sacrificing liquidity or lending revenue.
From compliance burden to commercial advantage
There is a tendency to treat T+1 as a compliance box to tick with people asking: ‘what is the minimum I can do to comply?’ In reality, firms that approach it as an operating-model upgrade will come out ahead. Automation and standardisation enable scale across markets and client segments. Better data and tighter integration across trading, lending, treasury, and collateral open the door to more sophisticated optimisation. Beneficial owners benefit twice: from more resilient settlement and, with the model tuned correctly, from stable — potentially enhanced — lending returns.
Asia does not need a lecture about the journey destination. It needs firms and people who understand the route — who know where the bottlenecks appear, which fixes compound, and how to knit together securities and FX so that the chain holds under pressure.
Conclusion: Different by design, stronger by choice
Asia is not a single market and should not pretend to be. The move toward T+1 will reflect that: different starting points, different constraints, different policy drivers. The question is whether the region can turn those differences into a source of strength, delivering local solutions that fit, and regional coherence where it counts.
That is achievable if the transition is led by practitioners who have done this before; if securities finance is embedded from the start; if FX is treated as a core dependency rather than an afterthought; and if trade associations do what they do best — bring the community together and accelerate good ideas — while industry leaders design and deliver the change.
Asia does not need a one-size-fits-all plan. It needs a plan that fits, market by market, with the right standards and the right sequencing so liquidity keeps moving, risk stays managed, and clients get the outcomes they expect in a T+1 world.
That is why importing a universal playbook will fail. The right approach is to anchor a coherent framework in each market’s imperatives, so lenders, borrowers, custodians, brokers, and asset owners can operate locally and cross-border without creating liquidity friction.
Our experience leading T+1 work across the UK and Europe is relevant, not because those initiatives are complete, but because the process works. Industry experts have been in the room from day one; securities finance has been part of the design, not an afterthought. The value lies in that precision, the specificity of the guidance, and the discipline of aligning recommendations with what firms can actually implement.
Why fragmentation bites harder in Asia
T+1 tightens every screw in the post-trade chain. When a portfolio manager trades US equities on T+1 and then turns to European and Asian allocations still on T+2, the costs of misalignment appear immediately. Funding windows narrow; intraday visibility becomes critical; collateral mobility slows if processes are not tuned for compressed returns and recalls. In Asia’s varied environment, those frictions do not just add up — they compound.
For securities finance, the picture is even more textured. Differences in central securities depository (CSD) functionality, market holidays, settlement discipline, tax treatment, and attitudes to short selling shape what is possible on day one of any local T+1 shift. A single template will not survive contact with those constraints. The better approach is to recognise what is unique in each market, while introducing enough common practice to avoid unnecessary fails and funding drag across the region.
What Europe and the UK really teach us
The lesson from UK and European workstreams are not the plans themselves, it is how they were built. Practitioners led the process, pulling securities finance into the centre of the discussion early. That ensured recalls, returns, partial settlement, standard settlement instructions (SSIs), inventory views, and collateral flows were part of the core design. Many recommendations from the EU securities financing transaction (SFT) workstreams now sit inside other workstreams because SFTs are integral to market functioning.
Equally important, the guidance has been lifecycle-specific, not slogan-driven. Trading, allocation, affirmation, matching, settlement, and fail remediation have been treated as a single journey. Recommendations have been tied to existing best-practice frameworks, enabling firms to act without reinventing operating models.
Asia can adopt the method — industry-led, SFT-embedded, lifecycle-specific, standards-aligned — without repeating the full learning curve.
Technology is the deciding factor
T+1 is a data and automation challenge wrapped in process and culture. Every acceleration has coincided with meaningful automation; where automation lags, settlement friction rises. Where it advances, volumes scale and operational risk falls.
Four realities shape Asia’s path: first, end-to-end automation is essential. Straight-through processing from execution through affirmation and settlement is foundational; for SFTs, automation must cover borrowing, returns, recalls, and reconciliations.
Second, automated partial settlement and shaping must be adopted, not just offered.
Third, real-time visibility into inventory, cash and collateral is critical. End-of-day reconciliation belongs to a T+2 world.
Finally — and uniquely for Asia — FX settlement cut-offs define the art of the possible. In markets with restricted convertibility or narrow windows, T+1 compresses timelines to the point where good SFT processes cannot compensate for challenging FX plumbing. A credible roadmap must place the securities-FX handshake at the centre. If the cash leg fails, the stock leg is irrelevant.
The overlooked risk: When core functions sit outside the lending ecosystem
Beneficial owners often access lending through fund managers outside the securities lending ecosystem. Portfolio managers, execution desks, FX teams, fund operations, agent lenders, and custodians may sit in different organisations, time zones, and incentive structures. Under T+1, that fragmentation magnifies risk.
A late-day Hong Kong trade executed by one team, allocated elsewhere, with FX handled under a separate policy, and recalls managed without visibility, creates timing conflicts that erode revenue and heighten settlement risk. The beneficial owner ends up asking the wrong question: ‘Why did the loan fail?’ instead of ‘Where did the operating model create the break?’
The fix is coordination: portfolio managers need timely sight of loaned positions and expeditious order routing; lending desks need visibility into trading intent and automated recall capability; borrowers must automate returns and deliver them on a timely basis; FX must be integrated with securities flows. Firms solving these issues in the UK and Europe are best placed to assist as Asian markets evolve.
Where trade associations fit — and where they don’t
Trade associations were not just helpful in the UK/EU effort; they were indispensable. The securities finance design would not have taken shape without the International Securities Lending Association (ISLA) and the International Capital Market Association’s (ICMA’s) ability to rally expertise and keep SFTs central. The Pan Asia Securities Lending Association (PASLA) can play the same crucial role in Asia, not by driving the change, but by creating the environment in which the industry’s best ideas can surface, align, and be executed.
Associations convene, coordinate, and communicate. They give the industry a voice and help convert technical insight into guidance. But they do not build operating models or resolve workflow conflicts. Their strength is elevating the signal and reducing duplication; the heavy lifting — sequencing change, wiring data, fixing recalls and returns, tuning FX hand-offs — belongs to practitioners.
What Asia needs next
A credible path to T+1 starts with market-specific diagnostics: what settles automatically today? Where do recalls and returns fail? Which CSD capabilities exist but are under-used? Which needs investment?
Next, cross-ecosystem alignment: portfolio managers, FX, fund operations, custodians, and agent lenders must share timing assumptions and map them out rather than hope everything will align on settlement date.
Then, market-by-market playbooks. Each market needs a practical sequence grounded in its own infrastructure and rules. That playbook must be technology-led: auto-partialling where available; harmonised SSIs; cleaner static data; real-time views; recall/return frameworks that work under compressed cut-offs; explicit solutions for the FX leg.
The goal is not to make Asia look like Europe, it is to let each market move at its own pace without creating friction for cross-border investors, and without sacrificing liquidity or lending revenue.
From compliance burden to commercial advantage
There is a tendency to treat T+1 as a compliance box to tick with people asking: ‘what is the minimum I can do to comply?’ In reality, firms that approach it as an operating-model upgrade will come out ahead. Automation and standardisation enable scale across markets and client segments. Better data and tighter integration across trading, lending, treasury, and collateral open the door to more sophisticated optimisation. Beneficial owners benefit twice: from more resilient settlement and, with the model tuned correctly, from stable — potentially enhanced — lending returns.
Asia does not need a lecture about the journey destination. It needs firms and people who understand the route — who know where the bottlenecks appear, which fixes compound, and how to knit together securities and FX so that the chain holds under pressure.
Conclusion: Different by design, stronger by choice
Asia is not a single market and should not pretend to be. The move toward T+1 will reflect that: different starting points, different constraints, different policy drivers. The question is whether the region can turn those differences into a source of strength, delivering local solutions that fit, and regional coherence where it counts.
That is achievable if the transition is led by practitioners who have done this before; if securities finance is embedded from the start; if FX is treated as a core dependency rather than an afterthought; and if trade associations do what they do best — bring the community together and accelerate good ideas — while industry leaders design and deliver the change.
Asia does not need a one-size-fits-all plan. It needs a plan that fits, market by market, with the right standards and the right sequencing so liquidity keeps moving, risk stays managed, and clients get the outcomes they expect in a T+1 world.
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