Commission welcomes political agreement increasing efficiency of EU capital markets thanks to shorter settlement cycle for EU securities

The European Commission welcomes the political agreement reached yesterday by the European Parliament and the Council on the amendment of the Central Securities Depositories Regulation (CSDR) to shorten the settlement cycle in the EU from two days to one by 11 October 2027.

Settlement is the process through which the buyer receives the security, such as shares or bonds, and the seller receives the cash. The settlement cycle is the period of time between the trade date (denoted as ‘T’) and the settlement date (the moment the buyer receives the securities and the seller receives the payment). This legislative amendment will shorten the settlement cycle of securities executed on EU trading venues, from two days (‘T+2’) to one day (‘T+1’) after the trading takes place.

The move to T+1 in the EU will bring important benefits by promoting efficiency and increasing resilience of EU capital markets. It will also help develop deeper and more liquid capital markets, which is a key objective of the savings and investments union (SIU). The shorter settlement takes, the shorter the risks faced by buyers and sellers last, and the shorter investors have to wait to receive the money or securities they are owed. The move will also eliminate the costs linked to the misalignment of settlement cycles between EU and other jurisdictions which already moved to T+1. Moreover, the amendment provides legal certainty on the date of the move to T+1 in the EU, ensuring a common way forward and allowing market participants sufficient time to prepare for the move.

Maria Luís Albuquerque, Commissioner financial marketor Financial Services and the Savings and Investments Union, said:

“I welcome the swift political agreement on T+1. Fast, efficient and resilient settlement is essential for the savings and investments union which aims to unlock private financing to boost EU growth. This agreement is an important step to make EU capital markets more attractive and competitive. In the coming months, we need to continue our close cooperation with EU public authorities and the financial industry to make T+1 a reality on the ground”.