T+1 Settlement: Next Steps (EU Governance Structure)

The likely move to a shorter (T+1) securities settlement cycle has seen a number of developments in recent weeks, culminating in yesterday's joint statement by ESMA, the European Commission and the ECB on the next steps to shortening the EU securities settlement cycle.

At its public hearing in July 2024, ESMA had already signalled its plans to submit a report on a potential move to T+1 to the Council of the EU and the European Parliament by January 2025 against the backdrop of the US move to T+1 earlier this year (for more information, read our July 2024 insights here: Shortening the Settlement Cycle against a backdrop of "instantaneous everything" – Arthur Cox LLP).

ESMA is on track to deliver its report in the coming weeks. However, the joint statement noted that it is "urgent to act if the EU wants to avoid prolonging and amplifying the negative effects of the misalignment with major jurisdictions internationally" – in light of that, the technical work needed