Faster Trades, Bigger Challenges: Mike Henson Weighs In on T+1 Settlement in FinanceFeeds

Adams & Reese Nashville Partner and Blockchain & Digital Assets Team Leader Mike Henson was recently featured in a FinanceFeeds article examining the broader implications of the United States' transition to T+1 settlement, a shift that now requires trades to settle within one business day rather than two. 

While the May 2024 move to T+1 was often characterized as a straightforward technical upgrade, the article highlights how the change has compressed a complex chain of post-trade processes, including trade allocation, custody instructions, compliance checks, and cross-border funding, into a significantly tighter window. For brokers and institutional participants, the transition has functioned less as a technology update and more as a full-scale operational transformation.

Henson's commentary focuses on the organizational challenges firms face as they adapt to faster settlement timelines. As he notes in the article, “A firm that upgrades its systems without redesigning workflows, escalation procedures, staffing, and counterparty coordination may be solving only half the problem.” His observation underscores that technology alone is insufficient; success under T+1 depends on coordinating people, processes, and counterparties in tandem. The article also explores the upcoming European transition to T+1, expected in October 2027, where fragmented markets, multiple currencies, and diverse legal jurisdictions will amplify the operational complexity that U.S. firms have already encountered.

Henson further addresses the relationship between T+1 and the growing conversation around tokenized securities and blockchain-based settlement. He cautions against viewing tokenization as an automatic successor to traditional infrastructure, stating that “T+1 does not necessarily create the case for tokenization. Rather, it makes the potential benefits and limitations of both approaches easier to see.”

Read the full article here.