T+1 in Europe: ESMA recommends a switchover by October 11, 2027
ESMA published the 18 November 2024 their report on the shortening of the settlement cycle in the European Union to T+1. ESMA recommends 11 October 2027 as the optimal date for the transition to T+1 in the EU, which is the same date that is currently being considered in the UK Accelerated Settlement Taskforce.
The operationalisation of T+1 should consist of three phases: finalisation of the identification of solutions to technical challenges, implementation and testing. In order to meet the 11 October 2027 deadline, ESMA recommends the following timeline: finalising the definition of technical solutions that the EU industry and the T2S governance have started by Q3 2025, implementing those solutions by the end of 2026 and testing all systems in 2027 ahead of the deadline for shifting to T+1 on 11 October 2027.
This proposal from the regulator will have to go through a legislative process to become official.