One year to go for T+1 settlement: the regulatory framework is complete

What happened

The European Union will switch to T+1 settlement on 11 October 2027. Ahead of the transition, the European Securities and Markets Authority (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.

With the publication of the RTS and ESMA Guidelines on standardised procedures and messaging protocols, the regulatory framework is now ready. The first deadline is for investment firms and their clients to comply with the new requirements on allocations and confirmations from 7 December 2026.

Regulatory detail and requirements

ESMA’s revised guidelines on standardised procedures and messaging protocols clarify how market participants should meet the new requirements on allocations and confirmations introduced by the amended RTS on Settlement Discipline. In particular, as of 7 December 2026, the mandatory use of: electronic, standardised communication channels and international messaging standards; and machine-readable communication methods, except in cases of temporary technical disruptions.

The guidelines and the amended RTS together complete the regulatory framework that ESMA has published for the T+1 transition.

ESMA statement

Verena Ross, ESMA’s chair, said:

“The transition to T+1 is one of the most impactful recent market structure initiatives. It will fundamentally improve the efficiency and international competitiveness of the EU markets. The date is known, the roadmap is clear, and, with the final piece of regulatory guidance published today, the framework is now in place for all players in the trading and settlement chain to prepare for 11 October 2027.

A successful transition is a shared effort by the industry and the public authorities. The focus now shifts to market participants to comply with the regulatory requirements, ready their systems and processes, and test their preparedness for the change, considering the recommendations of the EU T+1 Industry Committee.”