The Commission has proposed to shorten the settlement period for EU transactions in transferable securities from two days to one. The proposed legislative amendment would shorten the settlement cycle on securities – such as shares or bonds executed on EU trading venues – from two business days (the so called “T+2”) to one after the trading takes place (“T+1”). Settlement is the process through which the buyer receives the security and the seller receives the cash. The move to T+1 aims to strengthen the efficiency and competitiveness of post-trade financial market services in the EU, which are vital to a well-functioning Savings and Investments Union (SIU).
Having carefully considered the recommendations in the European Securities and Markets Authorities’ (ESMA) report in cooperation with the European System of Central Banks (ESCB) and the stakeholder input, the Commission is proposing a targeted amendment to the Central Securities Depositories Regulation (CSDR).
The proposal sets 11 October 2027 as the appropriate date for the transition to T+1 settlement. This timeline will give market participants sufficient time to develop, test and agree processes and standards to ensure an orderly and successful introduction of T+1 on EU capital markets. The proposal is also future proof, setting a maximum duration for the settlement cycle (T+1) while allowing market participants to settle their transactions faster, at T+0.
The full press release is here.