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European Union
European Securities and Markets Authority
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1671 charsEuropean Securities and Markets Authority Issues Statement on Trade Settlement T+1 Preparations and Key Deadlines
On June 20, 2024, the European Securities and Markets Authority (ESMA) issued a statement outlining key deadlines and action points for market participants preparing for the transition to T+1 (trade date plus one day) settlement in European securities markets.
The statement, referenced as ESMA74-2119945926-3773, provides guidance on critical milestones and requirements that market participants must meet to ensure a smooth transition from the current T+2 (trade date plus two days) settlement cycle. ESMA's statement addresses the operational, technical, and procedural changes necessary for investment firms, central counterparties (CCPs), central securities depositories (CSDs), and other post-trading infrastructure providers to implement T+1 settlement.
The statement identifies specific action points for market participants, including system upgrades, process modifications, and testing requirements. ESMA emphasises the importance of coordinated preparation across the post-trading ecosystem to manage risks associated with shortened settlement cycles. The guidance covers areas such as liquidity management, collateral arrangements, and contingency planning to ensure market stability during the transition period.
Market participants, including investment firms, trading venues, and post-trading service providers, must prioritise implementation of the necessary changes to meet ESMA's specified deadlines. The statement serves as a key reference document for the European securities industry's preparation for T+1 settlement and outlines the regulatory expectations for successful transition management.
The full statement is available on ESMA's website.
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1906 charsEuropean Securities and Markets Authority Issues Statement on Trade Settlement T+1 Preparations and Key Deadlines
On June 20, 2026, the European Securities and Markets Authority (ESMA) issued a statement outlining key deadlines and action points for market participants preparing for the transition to T+1 (trade date plus one day) settlement in European securities markets.
Key points include:
On 11 October 2027, the EU financial markets will move to a T+1 settlement cycle.
As a next step in the process towards T+1, ESMA proposed amendments to Commission Delegated Regulation (EU) 2018/1229 to set new requirements, which are particularly relevant for the transition to T+1. These amendments have now been endorsed by the European Commission, and are currently under scrutiny by the European Parliament and the Council.
Firms should consider these new requirements in combination with the recommendations of the EU T+1 Industry Committee4 , and accelerate the technical work needed to prepare for the transition to T+1 settlement on 11 October 2027.
Insufficient preparedness among market participants could trigger significant operational and reputational risks for those concerned. These can include flawed interdependencies with financial market infrastructures and IT providers, inability to meet client demands, and higher IT and training costs stemming from last‑minute remediation efforts.
Market participants will have to be fully compliant by the following deadlines:
First deadline: 7 December 2026, with the requirements to improve the first post-trade step, the exchange of allocations and confirmations, in terms of timing and through the default use of international communication standards.
Final deadline: 11 October 2027, with the requirements to optimise the settlement layer, including sending instructions early enough to securities settlement systems, and the generalisation of certain functionalities in CSDs, such as auto-partial settlement, hold & release, and auto-collateralisation.