European Securities and Markets Authority, European Commission and European Central Bank launch governance structure for EU transition to T+1 settlement

The European Securities and Markets Authority, together with the European Commission and the European Central Bank, has launched a new governance structure to oversee the European Union’s move from a T+2 to a T+1 securities settlement cycle, following ESMA’s recommendations on shortening the settlement cycle. The model centres on an Industry Committee chaired by Giovanni Sabatini and supported by technical workstreams covering technological and operational changes across trading, matching, clearing, settlement, securities financing, funding and foreign exchange, asset management, corporate events and settlement efficiency, alongside workstreams reviewing scope and the legal and regulatory implications. A Coordination Committee chaired by ESMA, with representation from the European Commission, the European Central Bank, ESMA and the Industry Committee chair, is intended to align authorities and industry and advise on emerging transition issues; the Commission is also considering whether legislative change should mandate a shorter settlement cycle. ESMA has recommended 11 October 2027 as the optimal date for moving to T+1 and envisages a phased implementation with milestones spanning technology upgrades, stakeholder engagement and regulatory alignment. Further details on the governance set-up and participating organisations are due in the coming days, and the Coordination Committee’s first meeting is scheduled for 6 February.