On 12 February 2025, the European Commission published a proposal to shorten the settlement cycle for EU securities from two days to one, through a targeted amendment to the Central Securities Depositories Regulation (CSDR).
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 (known as ‘T+2’) to one business day after the trading takes place (‘T+1’). This change is intended to strengthen the efficiency and competitiveness of post-trade financial market services in the EU.
The Commission states that its proposal for a move to T+1 is intended to:
- Promote settlement efficiency and increase the resilience of EU capital markets, as well as developing deeper and more liquid capital markets.
- Avoid market fragmentation and costs linked to misalignment between the EU and other global financial markets, which the Commission notes would contribute to the competitiveness of EU capital markets.
The proposed date for the transition to T+1 settlement is 11 October 2027, which the Commission explains would give market participants time to develop, test and agree processes and standards to ensure an orderly and successful introduction of T+1 on EU capital markets.
Next steps
The proposal will be submitted to the European Parliament and the Council for consideration and adoption. The changes will enter into force once the co-legislators have reached an agreement on the proposal and after publication in the Official Journal of the EU.