On 18 November 2024, the European Securities and Markets Authority (ESMA) issued a final report recommending that the migration to T+1 occurs simultaneously across all relevant instruments and that it is achieved in Q4 2027. ESMA believes that 11 October 2027 would be the optimal date for the transition and that a coordinated approach with other jurisdictions in Europe should be adopted.

ESMA has found that quantifying some of the costs and benefits relating to shortening the EU settlement cycle has been challenging. However, the elements assessed by ESMA suggest that the impact of T+1 in terms of risk reduction, margin savings and the reduction of costs linked to the misalignment with other major jurisdictions globally, represent important benefits for the EU capital markets. Furthermore, ESMA states that Article 5(2) of the Central Securities Depositories Regulation and the settlement discipline delegated regulation (Commission Delegated Regulation (EU) 2018/1229) will need to be amended to have legal certainty and foster the necessary improvements in post-trading processes needed to have a successful EU move to T+1.

Next steps

Following the publication of the final report, ESMA will continue its regulatory work related to the revision of rules on settlement efficiency, and addressing the T+1 governance together with the European Commission and the European Central Bank.