Cat-23 · T373 · Capital Markets Settlement · Non-DVP Retail Funds

Non-DVP Retail Fund Settlement Impact Assessor

Retail fund transactions predominantly use BACS — a 3-day clearing rail that is fundamentally incompatible with T+1 settlement. This tool scores your firm’s non-DVP settlement flows against the three available UK payment rails (BACS, FPS, CHAPS), models the annual cost uplift of migrating BACS flows to Faster Payments or CHAPS, flags transactions exceeding FPS’s £1 million ceiling, and outputs a phased migration plan with urgency scoring ahead of the Q4 2026 readiness deadline.

BACS Incompatible with T+1 Q4 2026 Readiness Deadline FPS · CHAPS · BACS UK AST Code of Conduct v1.0 · Zero PII · Browser-only

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REFPayment Rail T+1 Compatibility Reference
RailSettlement LagT+1 CompatibleCost per TxMax Single TxStatus under T+1
BACS 3 business days ✗ NO £0.01–0.02 No technical limit INCOMPATIBLE [1]
Faster Payments (FPS) < 2 hours (near real-time) ✓ YES £0.05–0.50 £1,000,000 per tx [3] COMPATIBLE (if <£1M) [3]
CHAPS Same-day ✓ YES £25–35 No limit COMPATIBLE but costly [2]
Panel 01Retail Settlement Profile

Retail subscription and redemption transactions per business day

Determines FPS £1M ceiling breach exposure

Panel 02Current Payment Rail Mix

Adjust sliders so the three rails sum to 100%. The validator below confirms the total.

75%

BACS is 3-day clearing — fully incompatible with T+1 settlement [1]

15%

FPS near real-time (< 2 hours); £1M cap per transaction [3]

10%

CHAPS same-day; no transaction value limit [2]

✓ Rail mix sums to 100%
Panel 03T+1 Migration Parameters
3%

These transactions cannot use FPS and must route via CHAPS [3]

Industry range: 1–2p per transaction

Industry range: 5–50p (bank-dependent)

Industry range: £25–35 per transaction

T+1 Non-DVP Impact Assessment
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Key Metrics
Rail Compatibility & Incompatibility Analysis
Recommended Rail Split Under T+1
RailCurrent MixRecommended (T+1)ChangeDriver
Annual Cost Uplift Analysis (250 business days)
Cost ComponentCurrent Annual (£)T+1 Annual (£)Uplift (£)Uplift per Tx
FPS £1M Ceiling Breach — CHAPS Overflow
Phased Migration Plan
Policy Mandate · CC BY 4.0 · Post Oak Labs

Regulatory Citations

[1]UK Accelerated Settlement Taskforce (AST) Code of Conduct — Non-DVP Fund Settlement Requirements under T+1. BACS 3-day clearing is structurally incompatible with T+1 settlement windows for retail fund subscriptions and redemptions. Firms must identify and migrate all non-DVP BACS flows prior to UK T+1 go-live (11 October 2027).
[2]THEIA T+1 Report January 2026 — Non-DVP Retail Fund Settlement Impact Analysis. The Investment Association’s T+1 working group identifies BACS-dependent retail fund settlement as a principal operational risk. Report models migration pathways to FPS and CHAPS for UCITS, unit trusts, and investment trusts.
[3]Pay.UK Faster Payments Rules — £1,000,000 per-transaction single immediate payment limit. Transactions exceeding this limit cannot be processed over FPS rails and must use CHAPS or be restructured into multiple sub-£1M payments. Asset managers with high-value retail flows must plan for CHAPS integration or transaction restructuring.
[4]CREST Modernisation Programme — T+1 Settlement Window Requirements. Euroclear UK & Ireland (CREST) is implementing changes to support T+1 settlement cycles. Retail fund settlement timing must align with CREST windows to avoid fails and associated penalty charges under CSDR.
[5]FCA Dear Compliance Officer Letter January 2026 — Retail Fund Manager T+1 Obligations. The FCA expects retail fund managers to identify non-DVP settlement flows, assess rail compatibility, and develop migration plans. Testing readiness required by Q4 2026 ahead of UK T+1 go-live (11 October 2027).