The EU T+1 Coordination Committee, chaired by the European Securities and Markets Authority (ESMA), has published its summary of conclusions for July 2026, detailing the latest progress and outstanding issues in the bloc's shift to a one-day settlement cycle for securities transactions. The document, released on 31 July 2026, consolidates the committee's discussions on the operational, legal, and cross-border readiness for T+1, a move that will compress the current two-day settlement period and affect market participants across the EU.
The committee's conclusions come as the EU prepares to align with global trends toward shorter settlement cycles, following similar moves in the United States and Canada, which transitioned to T+1 in May 2024. The summary outlines the committee's focus on harmonising settlement discipline, updating market infrastructure, and addressing the implications for cross-border transactions, particularly with jurisdictions that have not yet adopted T+1. ESMA, which coordinates the committee, has been tasked with ensuring a smooth transition, with the European Commission and national competent authorities also involved in the preparatory work.
Key themes in the July conclusions include the need for enhanced coordination among central securities depositories (CSDs), trading venues, and investment firms to minimise operational risks during the transition. The committee also emphasised the importance of aligning legal frameworks, such as the Settlement Finality Directive and the Central Securities Depositories Regulation, to support the shorter cycle. Market participants, including banks, brokers, and institutional investors, are expected to face significant adjustments in their post-trade processes, with the committee recommending robust testing and contingency planning.
The document also highlights the potential benefits of T+1, such as reduced counterparty risk and lower margin requirements, which could improve market efficiency and liquidity. However, it acknowledges the challenges, particularly for smaller firms and those operating across multiple jurisdictions, which may face higher compliance costs and operational burdens. The committee's conclusions will feed into the European Commission's ongoing assessment of the T+1 timeline, with a formal legislative proposal expected in the coming months. Stakeholders, including industry associations and investor groups, have been invited to provide feedback on the committee's recommendations, with a view to finalising the transition framework by the target date of late 2027.