Settlement – Transition to T+1

The ambitious goal of transitioning to a one-day settlement cycle, or T+1, scheduled for 11 October 2027, has spurred a raft of changes, including a revision of the EU’s Central Securities Depositories Regulation. The European Council and Parliament recently endorsed two key proposals for the regulation that have been a major focus for AMAFI (AMAFI/25-22) and are designed to preserve orderly markets:

• The ability to temporarily suspend payment of default penalties in the event of a crisis;
• An exemption from T+1 settlement for securities financing transactions.

With ESMA readying technical standards for the same regulation, AMAFI set out its positions on several critical issues for the switch to T+1 (AMAFI/25-37), emphasising the need for:

• Standards that are consistent with work being done in industry.
• An approach based – at least initially – on existing market practices rather than new rules, in line with the Commission’s simplification goals.
• A sufficient transition period to allow participants to adapt, instead of starting application in January 2026.