EU Industry Committee finalises roadmap to T+1 transition

What does this mean?

The EU T+1 Industry Committee’s report identifies the critical areas of focus that are needed in order to drive the transition to T+1 across securities markets in the EU and EEA by 11 October 2027. 

The Committee notes the report’s recommendations will support market participants’ identification of relevant operational and regulatory changes, as well as budget allocations, necessary to operate effectively in T+1. 

The report emphasises the importance of market participants adopting automation and standardisation across all stages of the post-trade lifecycle, and the need to eliminate manual interventions and improve the quality of static reference data to facilitate straight-through processing (STP). 

Timing and scope

As previously announced, the date for T+1 transition across EU and EEA markets will be 11 October 2027, aligning with UK and Swiss markets. 

The report confirms the main scope of T+1 settlement applies to transactions in transferable securities traded on an EU trading venue and settling in an EU-registered CSD, as per Article 5(2) of the Central Securities Depositories Regulation (CSDR).

The report notes that political agreement was recently achieved in a trilogue meeting on 18 June 2025, providing an exemption from T+1 settlement for all relevant Securities Financing Transactions (SFTs) provided they are “documented as single transactions composed of two linked operations.” 

The Industry Committee also welcomes the political agreement reached on the possible suspension of cash penalties under CSDR. The legislative recital empowers the European Commission to temporarily suspend cash penalties where a material risk in settlement fails is identified.

Although derivatives that do not result in a settlement on the books of a Central Security Depository (CSD) are considered out of scope of CSDR - and therefore T+1 settlement - further industry discussion will take place to determine whether some derivatives-related flows would benefit from a default T+1 settlement cycle. 

Operational Timetable

The report establishes a single, standardised operational timetable to guide the transition to T+1 settlement across EU and EEA markets. 

There will be no legal compulsion for market participants to adopt the recommendations, however the Committee will adopt an ‘adhere or explain’ approach, requiring market participants to provide an explanation and notify relevant stakeholders if they choose not to adhere to the Committee’s recommendations. 

The timetable is structured around 11 ‘gating events’ - activities and processes occurring after trades are executed - that provide a process flow for all EU settlement systems and participants in a T+1 environment. These are:

1. Stock Loan Recall Deadline: All market participants should adopt a standardised deadline for recall notification requests of 17:00 CET on Trade Date (T). To be actioned by October 2027.
2. CCP End-of-Day (EOD) Process: Trades executed before 22:00 CET should be included in CCPs’ EOD netting (where applicable for cleared markets). To be actioned by end-2026. 
3. CCPs should release EOD netting reports and input settlement instructions by 22:30 CET on T. To be actioned by end-2026.
4. Allocations & Confirmations must be completed as soon as possible, and no later than 23.00 CET on T. To be actioned by end-2026. 
5. Settlement Instructions (SIs): To be included in night batches, SIs should be submitted to Securities Settlement Systems (SSS) by 23:59 on T. To be actioned by October 2027.
6. Start of Settlement: SSSs should open for settlement at the latest by 00:00 CET and C1S4 batch settlement process at TARGET2-Securities (T2S) should run at 00:00 CET, with the same priority order as today. To be actioned by October 2027.
7.  FX Transactions: Should be dealt, processed and submitted to CLS by 00:00 on Settlement Date, to be included in the CLS settlement process. Ongoing expectation.
8.  Stock Loan Recalls/New Loans: The return notification deadline should be set at 15:00 CET on Settlement Date. To be actioned by October 2027. 
9.  The best practice deadline for settlement of recalled securities should be 15:30 CET on Settlement Date. To be actioned by October 2027. 
10. Delivery versus Payment (DvP) Cut-off: All SSSs should align to a 16:00 CET DvP cut-off at the earliest (for EUR and other EEA currencies). To be actioned by October 2027.
11. Free-of-Payment (FOP) Cut-off: All SSSs should align to a 18:00 CET FOP cut-off. To be actioned by October 2027.

The report also establishes a series of other targeted recommendations for market participants to prepare for a T+1 environment. These recommendations complement the Operational Timetable structure and are categorised in line with the post-trade cycle - trading, matching and confirmation, clearing, settlement - as well establish bespoke recommendations relating to FX, Corporate Events, Asset Management and SFTs. 

These recommendations include:

• Partial settlement and Hold & Release functionality, should be provided by all CSDs without exception, and be supported by all intermediaries by October 2027. 

• Settlement cycles for funds units: Investment management firms should aim to reduce settlement cycles for subscriptions and redemptions of investment funds units to T+2, where appropriate. 

• Firms are strongly encouraged to adopt electronic standardised communication methods for exchange of allocations and confirmations to support STP, by end-2026. 

• For cash equities, market participants should compress their own clearing processes as much as possible to ensure they have performed reconciliation & inventory management as well as record creation & sending/releasing of settlement instructions by the start of settlement.

The report also highlights where further analysis will be undertaken to understand and assess the impact of specific recommendations: 

• An Industry Taskforce to be established in Q3 2025 to develop a single ‘gold standard’ format for settlement instructions and to agree market standards for populating, sharing and storing SSIs. The Taskforce will also seek to develop market practice mandating the use of partial settlement as default. 

• The Industry Committee to explore the extension of DvP cutoff to 17.00 CET. Analysis to be concluded by end-2025.

• The SFT workstream to undertake further analysis to identify measures to optimise SFT settlement, including the introduction of a batch settlement cycle during the day to address intraday liquidity concerns. 

What do firms need to do?

The publication of the EU Industry Committee’s final recommendations and roadmap is a significant milestone in the transition to T+1 settlement across the EU and EEA, as well as in the UK and Switzerland. The report confirms the final steps that all market participants and their counterparties will need to take in order to be ready to settle on T+1, for in-scope financial instruments.

Market participants that have not already started preparing for T+1 transition should do so without delay. Mirroring the UK AST recommendations, market participants should establish project management arrangements, undertake an impact analysis, and secure funding in 2025 for the system enhancements that will be needed for T+1. 

Emphasis on automation and the reduction of manual processing across the end-to-end settlement cycle should be a high priority. Market participants should also be cognisant of their clients/counterparties’ preparedness ahead of 11 October 2027, ensuring they are equally aligned to meet the Industry Committee’s recommendations.

While alignment with the UK AST recommendations has been a factor in the development of the EU Industry Committee’s report, there will be areas where the recommendations differ to reflect the idiosyncrasies of the different markets - for example the deadline for allocation and confirmation processing (23:00 in EU vs. 00:00 in UK). Market participants preparing for transition across the EU, UK and/or Switzerland should remain alert to the differences in transition expectations across these markets and ensure they are appropriately prepared to manage the specific implementation timelines and operational requirements applicable in each jurisdiction.

Next steps

The EU Industry Committee will continue to monitor and oversee market developments and preparations for T+1, updating its recommendations if required. 

Further analysis will be undertaken by the Industry Committee and prospective Industry Taskforce to develop more detailed recommendations and market practice in specific areas. The Industry Committee will also continue work to prepare for the testing phase in the T+1 transition.