On 16 October 2026, the European Securities and Markets Authority (ESMA) published a Final Report setting out revised guidelines under the Central Securities Depositories Regulation (CSDR) on standardised procedures and messaging protocols used between investment firms and their professional clients.

Background

Article 6(2) of the CSDR requires investment firms to establish arrangements with their professional clients to ensure the timely settlement of securities transactions, which mostly concern arrangements for the communication of allocations and confirmations and are further developed by Articles 2 and 3 of the regulatory technical standards (RTS) set out in Commission Delegated Regulation (EU) 2018/1229 (RTS on Settlement Discipline).

Regulation (EU) 2025/2075 changed Article 5(2) of the CSDR to cut the settlement period from two business days after the trade to one. This will take place on 11 October 2027. However, the first deadline under the new regime is for investment firms and their clients to comply with the new requirements for trade allocations and confirmations starting 7 December 2026.

Commission Delegated Regulation (EU) 2026/1536 was introduced mainly to prepare the EU’s settlement discipline rules for the move from T+2 to T+1 settlement. It made certain amendments to Articles 2 and 3 of the RTS on Settlement Discipline and these amendments are due to apply on 7 December 2026.

In May 2026, ESMA issued a consultation paper outlining changes to its 2019 guidelines on the standardised procedures and messaging protocols to be used between investment firms and their professional clients in the communication of allocations and confirmations in light of the amendments to Articles 2 and 3 of the RTS on Settlement Discipline.

The Final Report now published presents the outcome of the public consultation and the final version of the revised 2019 guidelines. 

Changes

The main changes made to the 2019 guidelines are: –

  • Clarifying that arrangements on allocations and confirmations between an investment firm and its professional client can be included under any legally binding agreement.
  • Aligning the guidelines with the new Article 2(1) fourth paragraph of the RTS on Settlement Discipline to require the use of electronic standardised communications methods and international open communication procedures and standards for messaging and reference data defined in Article 2(1)(34) of the CSDR. In line with that, internal or domestic messaging standards are no longer usable, as these are incompatible with the new regulatory framework.
  • Removing the reference to the possibility of communicating confirmations and allocations orally and clarifying that the use of other means, including emails and graphical user interfaces may be compliant with the new framework, provided that their content is machine-readable.
  • Specifying that alternative non-electronic communication methods, including mail, faxes, or recorded phone calls, may be used only in the exceptional case of temporary technical unavailability or service disruption.

Next steps

Following their translation in all EU languages, the revised guidelines will be published on ESMA’s website. They will become applicable on 7 December 2026, at the same time as the relevant provisions of the RTS on Settlement Discipline.

The EU will switch to T+1 settlement on 11 October 2027. Ahead of the transition, ESMA calls on market participants to finalise technical preparations, assess readiness across their entire ecosystems and begin testing as soon as possible throughout the trading and settlement chain.

Global perspective

Our previous issue of Regulation Around the World considered how different jurisdictions were moving to T+1 settlement.