BoE securities lending committee flags T+1 readiness gaps and AI governance risks
The Bank of England's Securities Lending Committee met on 15 September 2026 to review T+1 settlement preparations, tax harmonisation challenges, digital asset developments and emerging AI use cases in securities finance. The minutes, published 22 October, give compliance teams a read on industry-wide readiness gaps and the issues supervisors and market bodies are watching ahead of October 2027 implementation.
- The committee noted industry participants are broadly on track for T+1 implementation in October 2027 but highlighted significant differences in readiness between firms.
- Persistent operational challenges include securities lending recalls, collateral sourcing, funding, settlement timing, partial settlements and agent lender capabilities.
- The Tax & Regulations sub-committee reported increased operational challenges from holding-period rules and record date requirements across national tax regimes, which T+1 could amplify.
- The group discussed a legal case involving potential re-characterisation of a securities financing transaction as a secured loan, which it said could have significant implications for repos and securities lending.
- Members raised concerns about AI use in governance, resilience, vendor oversight and data security, particularly if AI systems gained access to sensitive operational data.