FX Trade Settlement 2026

On 11 October 2027, securities settlement across the UK, the EU and Switzerland will compress to T+1. That change removes a day that FX desks currently rely on to arrange, net and fund currency. For flows that already sit at the back of the settlement queue, such as cross-border, emerging-market and non-bank, that day was doing a lot of work. This report argues that settlement method is not a technology choice. It is an economic one, set by the trade that the currency leg supports.

Drawing on the 2025 BIS Triennial Survey, the report shows where the market actually sits. Of the USD 14.2 trillion in daily FX obligations, 36% settles through Payment versus Payment (PvP), the risk-eliminating method at the top of the FX Global Code’s settlement preference hierarchy. A further 54% settles through netting, which reduces exposure without removing it. The remaining 10%, which is more than USD 1.4 trillion a day, settles gross bilateral, with the full principal of one leg exposed to the other’s failure.

T+1 will make that residual harder to shift. A shorter cycle means fewer offsetting flows to net. Fewer offsets means more must be funded gross. More gross funding means more capital committed to settle the same volume of business.

The report sets out what this means for the sellside desk: where the capital cost concentrates, which flows carry the most exposure, and why the flow that is hardest to settle is also the most differentiating to win.