EU T+1 INDUSTRY COMMITTEE

The settlement cycle, i.e. the time between the execution of a transaction and its settlement, is a cornerstone of the functioning of the capital market. In the EU, the Central Securities Depositories Regulation[1] (CSDR) has harmonized the length of the settlement cycle for transactions in transferable securities executed on EU trading venues. Currently, the length of the settlement cycle is set at two business days after the trade date (T+2). A recent amendment to the CSDR will shorten the settlement cycle to T+1. This amendment will enter into force on 11 October 2027.

[1] Regulation (EU) No 909/2014

Article 1 of the Regulation[1] providing for shorter settlement on the EU capital market specifies that the following transactions in transferable securities are to be exempted from the T+1 requirement:

1. transactions which are negotiated privately but executed on a trading venue;
2. transactions which are executed bilaterally but reported to a trading venue;
3. the first transaction where the transferable securities concerned are subject to initial recording in book-entry form pursuant to Article 3(2);
4. the following securities financing transactions, provided that they are documented as single transactions composed of two linked operations:
   1. securities lending or securities borrowing as defined in Article 3, point (7), of the Securities Financing Transactions Regulation[2] (SFTR);
   1. buy-sell back transactions or sell-buy back transactions as defined in Article 3, point (8), of SFTR;
   1. repurchase transactions as defined in Article 3, point (9), of SFTR.

[1] Regulation (EU) 2025/2075 amending Regulation (EU) No 909/2014 as regards a shorter settlement cycle in the Union

[2] Regulation (EU) 2015/2365 of the European Parliament and of the Council

The move to T+1 will promote settlement efficiency, reduce counterparties risk, improve capital and liquidity efficiency and increase the resilience of EU capital markets. The move to T+1 will also help avoid market fragmentation and costs linked to misalignment between EU and other global financial markets such as the United States, which moved to T+1 on 28 May 2024, and the United Kingdom and Switzerland, which announced their intention to move to T+1 on the same day as the EU (i.e. 11 October 2027).

As per the amendment introduced in CSDR by Regulation (EU) 2025/2075, the transition to T+1 settlement in the EU is scheduled for 11 October 2027[1].

[1] Regulation (EU) 2025/2075 amending Regulation (EU) No 909/2014 as regards a shorter settlement cycle in the Union

Following from the report on the shortening of the settlement cycle in the EU published by the European Securities and Markets Authority (ESMA) in November 2024, the legislative amendment introducing T+1 in the EU aims to strengthen the efficiency and competitiveness of post-trade financial market services, which are vital to a well-functioning Savings and Investments Union (SIU). In the medium‑term, it will bring important benefits for a wide range of stakeholders. Furthermore, it will allow to remove/avoid the costs due to misalignments in the settlement cycles with those jurisdictions that have already moved, or have announced their intention to move, to T+1.

T+1 will promote settlement efficiency and increase the resilience of EU capital markets. A quicker turnaround of securities and capital will free up liquidity, reduce counterparty risk and hence margin requirements. In addition, it will align the EU settlement cycle with other major capital markets, thus reducing frictions for EU market participants trading in non-EU capital markets.   

The Committee was set up to coordinate the transition to T+1 across the EU and EEA and to ensure a harmonised and efficient implementation. It brings together Industry Experts, European associations, market infrastructures, financial institutions.

The Committee members consist of the independent Chair Giovanni Sabatini, one representative from each of the ten Member Associations that represent financial market in Europe, and the co-leads of the 12 Technical Workstreams. In addition, observers from various EU trade associations, the UK Accelerated Settlement Taskforce, the Swiss Securities Post Trade Council, Swift, as well as from the European Commission, ESMA and the ECB participate in meeting of the Committee. See the full list in the relevant section.

The project is guided by a governance structure including co-leads of technical workstreams addressing key operational areas: the T+1 Industry Committee, chaired by Giovanni Sabatini. The outcome of Industry Committee work is reported and discussed at least quarterly with the European Commission, the ECB and ESMA representatives at the T+1 Coordination Committee, chaired by Verena Ross, Chair of ESMA.

Europe’s complexity (30 jurisdictions, multiple CSDs, CCPs, trading venues, currencies, and different legal, fiscal, and regulatory frameworks) makes coordination challenging. Areas impacted include trade matching, clearing, FX transactions, repo, securities lending, and corporate actions.

Dedicated workstreams gather subject matter experts to identify challenges, propose solutions, and propose  industry market practices across specific areas of the trading and post-trading value chain.

No. The recommendations are not legally binding but use the “adhere or explain” principle to strongly encourage all stakeholders to apply recommendations included in the EU T+1 Industry Committee High-Level Roadmap. Supervisory authorities may consider them in their oversight activities, as non-adherence could impact market efficiency and stability. However, given that ESMA’s RTS on settlement discipline mirrors certain recommendations (for instance, on allocation and confirmations, and on CSD functionalities), these recommendations are likely to become enforceable regulatory requirements.

A high-level timeline is available [here]. Now the first phase of definition of solutions to support the move to T+1 is concluding, through legal and regulatory requirements as well as industry recommendations, a phase of implementation will start in 2026, to allow for testing in 2027.

Until the go-live date, the Committee will continue to work towards publishing further material to support market participants in their transition to T+1. The goal is a coordinated, resilient, and efficient transition ensuring the EU’s global competitiveness.

Additional resources, including the Terms of Reference, Committee composition, and workstream membership, are available on this website in the relevant sections. Stakeholders can contact the Committee Secretariat for engagement opportunities, moreover all the email addresses are available in the Contact section.

Market participants are strongly encouraged to adopt the recommendations set out in the High-Level Roadmap for T+1 settlement. If they choose not to implement them, they are expected to provide a clear and transparent explanation to their respective users and clients on which alternative they intend to use to comply with the T+1 requirement. This approach promotes accountability and encourages alignment across the industry, while allowing flexibility for firms with specific operational or regulatory constraints. The “Adhere or Explain” principle ensures that deviations are justified and documented, that appropriate alternatives are explored and that any remaining detrimental impact to other stakeholders is minimized, thus fostering trust and consistency in the transition process.

The Industry Committee has limited power to enforce its recommendations. Hence, the regular exchanges it has with EU authorities are essential. It should be noted that certain amendments to the RTS on Settlement Discipline proposed by ESMA in its recent Final report are aligned with some recommendations formulated in the High-Level Roadmap.

In the T+1 settlement context, participants in the custody chain play a foundational role. Their implementation decisions directly impact downstream entities that rely on their services and timelines. By clearly explaining how key players plan to adopt the recommendations in the High-Level Roadmap but also disseminate relevant information and knowledge along the chain, these actors enable others in the value chain to plan accordingly, align their own processes, and mitigate risks. This transparency fosters coordination, reduces uncertainty, and supports a smoother industry-wide transition to T+1.

As per Regulation (EU) 2025/2075, the Commission is expected to keep track of market developments, the volume of settlement fails and the readiness of the industry to comply with the T+1 settlement cycle requirement, and to consider, accordingly, whether there is a significant risk that the move from a T+2 to a T+1 settlement cycle requirement would lead to a material increase in settlement fails. Where such a risk would be identified, the Commission is able, where necessary, to consider whether to adjust the cash penalties regime accordingly, or to take any other appropriate measure under the CSDR, in order to mitigate both financial and non-financial adverse consequences.

The settlement discipline regime is an indispensable element of the settlement framework on the EU capital market and market participants must prepare accordingly. This is why the Committee started its work early in 2025, to give the whole industry time to carefully plan, budget, implement and test the necessary changes in their processes before the 11 October 2027 deadline.  

Lastly, according to data from jurisdictions that have already moved to T+1, no increase in settlement fails has been recorded in the period around the move.

The amendment to the CSDR setting the settlement cycle on the EU capital market at T+1 has recently been adopted in the European Union[1]. It sets 11 October 2027 as the transition date for T+1 in the EU

ESMA has also recently submitted to the European Commission a proposal for amending the regulatory technical standards on CSDR’s settlement discipline regime (SDR). Some of these proposed amendments are aligned with recommendations from the Industry Committee’s High-level roadmap and includes aspects such as mandated use of standardized electronic communications for allocations/confirmation, inclusion of PSET information in the allocations, and mandatory auto-partial and hold & release offering at all CSDs.

[1] Regulation (EU) 2025/2075 amending Regulation (EU) No 909/2014 as regards a shorter settlement cycle in the Union

In the T+1 settlement context, all participants in the custody chain play an important role. Each actors’ implementation decisions directly impact other entities that they interact with. Service providers should explain how they plan to adopt the recommendations in the High-Level Roadmap and also how they plan to disseminate relevant information and knowledge along the chain, enabling others in the value chain to plan accordingly, align their own processes, and mitigate risks. This transparency fosters coordination, reduces uncertainty, and supports a smoother industry-wide transition to T+1.

T+1 will ensure that EU markets stay competitive globally, and hence it will play an important role in advancing the SIU agenda. While T+1 will help in harmonizing market practices across the EU, it is not expected to be a catalyst in consolidating the CSD landscape.

While the US has already moved to T+1, the EU’s transition is more complex due to its multi-jurisdictional market structure. The EU approach emphasises strong governance, inclusive representation, and continuous dialogue among stakeholders including assessment on global business process and where necessary includes technical details.

The EU Industry Committee has been in close alignment with these jurisdictions from the very beginning. Aside from regular exchanges on market practices and implementation roadmap, the EU, UK, Switzerland, Liechtenstein, and Norway, have all agreed on the 11 of October 2027 as their transition date on T+1, which demonstrates a strong commitment to increasing synergies ahead of the transition while reducing risks and disruptions across these markets.