As the Central Securities Clearing System (CSCS) PLC., prepares to launch its T+1 settlement cycle on May 29, 2026, a familiar argument resurfaced: that markets should “fix the basics first” before pursuing major reforms. It sounds convincing until you examine how markets actually evolve. In reality, this position often serves as a polite excuse for delay. The criticism of T+1 is not just misplaced; it fundamentally misunderstands how meaningful reform happens.
T+1 is not a cosmetic adjustment to a system already under strain. It is a structural shift that forces the market to confront long-standing inefficiencies. Critics point to slow share unblocking, manual post-trade processes, opaque auctions, and high transaction costs as reasons to delay. But these are precisely the problems that T+1 is designed to expose and eliminate. Settlement cycles define the entire rhythm of market operations.
In a T+2 environment, delays like a 30-minute share unblock are tolerated. They may be frustrating, but they do not threaten the system. In a T+1 system, they are unacceptable. There is no margin for delay when settlement must occur within a single day. The system either adapts, or it breaks. That is not a flaw in T+1. It is its greatest strength. The same applies to post-trade processes. Manual allocation, delayed affirmation, and fragmented custody instructions cannot survive in a next-day settlement environment. Markets that have already adopted T+1 have not simply adjusted, they have transformed. They have been forced to implement straight-through processing, automate workflows, and enforce same-day discipline. T+1 does not coexist with inefficiency; it eliminates it.
The idea that markets must address all structural issues before upgrading settlement is fundamentally flawed. Reform does not happen in isolation or in neat, sequential stages. It happens through pressure, urgency, and constraint. T+1 provides all three. It creates a system where inefficiency is no longer tolerated, not because regulators say so, but because the system itself cannot function otherwise. Consider transparency in auctions and price discovery. Better price formation depends on real-time data, faster matching engines, and improved communication across participants.
Transaction costs are also part of this equation. Faster settlement reduces counterparty risk and shortens the period in which capital is locked up. This improves liquidity and reduces the implicit cost of trading. While T+1 may not directly lower exchange fees, it changes the underlying economics of the market. As efficiency improves and participation increases, it becomes harder to justify high or opaque cost structures. Over time, this creates natural pressure for pricing reforms.
Concerns about retail participation are often raised in the same breath as T+1. But these are not conflicting objectives. Expanding access and improving infrastructure go together. A market that is faster, more reliable, and more efficient is inherently more attractive to retail investors. Efficiency builds trust and trust drives participation.
The deeper issue with opposing T+1 is the assumption that change can be carefully sequenced so that markets can first “fix everything” and only then upgrade settlement. History shows the opposite. Without a forcing mechanism, inefficiencies persist. They are acknowledged, discussed, and then postponed. T+1 disrupts that cycle. It introduces a hard constraint that makes delay impossible.
This is where the role of institutions like the Central Securities Clearing System becomes critical. By committing to a T+1 framework, CSCS is not just implementing a technical change, it is setting a new standard for the entire market ecosystem. It signals a shift from tolerance of inefficiency to a demand for performance.
Of course, T+1 is not a silver bullet that will resolve every structural issue overnight. But that is not the standard by which it should be judged. Its purpose is not to fix every problem, it is to make those problems impossible to ignore. And in doing so, it accelerates the very reforms that critics claim should come first.
In reality, T+1 is the catalyst that unlocks progress across multiple dimensions simultaneously. It pushes markets toward automation, demands faster decision-making, and encourages investment in infrastructure. It aligns local markets with global standards and signals readiness for deeper integration into the international financial system. In the end, T+1 is not the problem. It is the pressure the system has been missing and the push the market needs to finally move forward.
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Sola Oni, an integrated communications strategist, Chartered Stockbroker and Commodities Broker and Capital market registrar, is the Chief Executive Officer, Sofunix Investment and Communications. You can reach him at onisola2000@yahoo.com
Who’s afraid of the T+1 settlement cycle of CSCS?