The European Commission has proposed an amendment to the Central Securities Depositories Regulation (CSDR) with a view to enable the EU’s transition to a T+1 settlement cycle. Simultaneously, the commission has proposed that the EU move to T+1 on 11 October 2027 – in line with the recommendation given by the European Securities and Markets Authority (ESMA) in its November 2024 report.
The commission describes its proposal as “future proof”, as it sets the maximum duration for the settlement cycle at T+1 while allowing market participants to settle their transactions at T+0 if they so wish.
Based on the commission’s analysis and the ESMA report, the expected benefits of moving to T+1 should, over time, outweigh the initial costs of investments that the transition will require. These benefits include increased automation and efficiency of post trade processes; risk reduction; lower margin requirements; and elimination of costs related to misalignment.
The proposal will be submitted to the European Parliament and Council for consideration and adoption. The changes proposed will enter into force after publication in the EU Official Journal.
