On 8 July 2026, the Council of the European Union published a Commission Delegated Regulation amending the regulatory technical standards (RTS) on settlement discipline under the Central Securities Depositories Regulation (CSDR). The amendments, adopted by the Commission on 6 July 2026, impose new data, automation, and reporting obligations on central securities depositories (CSDs), investment firms, and market participants in the EU and EEA, aiming to boost settlement efficiency and prepare for the T+1 settlement cycle applicable from 11 October 2027.
The Delegated Regulation updates the existing RTS (Delegated Regulation 2018/1229) by expanding the scope of allocation and settlement instructions to include buy-sell back and sell-buy back transactions. Investment firms must ensure professional clients provide settlement reference data in a standardised, electronic machine-readable format, kept updated, while retail clients must send settlement information by 23:00 CET on the trade date. CSDs are required to enable auto-partial settlement, with participants allowed to opt out, and must offer real-time gross settlement or at least three settlement batches per business day. Additionally, CSDs must facilitate access to intra-day cash credit secured with collateral via automated collateralisation, excluding CSDs holding a banking licence that directly provide such credit. CSD participants must report main reasons for settlement fails and measures to address them, and CSDs must report settlement fail data in standardised electronic format to competent authorities.
Policy orientations and trade-offs The regulation tightens settlement discipline to reduce fail rates and enhance market efficiency, particularly in view of the upcoming T+1 settlement cycle. However, it imposes significant compliance costs on CSDs, investment firms, and participants, requiring upgrades to IT systems, standardisation of data formats, and increased automation. The mandatory auto-partial settlement and real-time or batch settlement requirements may increase operational complexity for smaller CSDs, while the opt-out provision offers some flexibility. The exclusion of banking-licensed CSDs from the automated collateralisation requirement avoids duplication but may limit access to intra-day credit for some participants.
Impact on stakeholders - CSDs: Must implement auto-partial settlement, offer real-time or batch settlement, and facilitate automated collateralisation, requiring IT investments. Exemption for banking-licensed CSDs reduces their burden but may create uneven competitive conditions. - Investment firms: Must ensure professional clients provide standardised electronic settlement data and enforce retail client deadlines, increasing compliance and monitoring costs. - Market participants (professional and retail clients): Professional clients face new data formatting obligations; retail clients must meet a strict 23:00 CET deadline, potentially requiring process changes. - Competent authorities and ESMA: Gain enhanced reporting data on settlement fails, improving oversight but requiring resources to process standardised electronic reports.
Institutional follow-up The Delegated Regulation enters into force on 6 July 2026, with different measures applying from varying dates. Competent authorities will monitor compliance, and ESMA will oversee implementation. The regulation is a preparatory step for the T+1 settlement cycle, which the European Commission and ESMA have been advancing through separate initiatives.