EU regulators push for faster settlement in financial markets

The European Union’s (EU) financial regulators called for urgent action to speed up the bloc’s financial markets, aiming to transition to a T+1 settlement system to match the pace of global peers.

The European Securities and Markets Authority, the European Commission, and the European Central Bank (ECB) released a joint statement highlighting the benefits of reducing securities transaction times from two days to one.

Countries like the US adopted the T+1 system in May, and the EU regulators emphasised the need for swift action to avoid prolonging the negative impacts of being out of sync with other major markets.

Achieving this acceleration would require updates to technology, operational processes, and staffing.

While the EU eyes a possible transition to T+1 by the end of 2027, some market experts worry that the timeline is too ambitious given the region’s complex infrastructure. The UK is also targeting a similar transition date, and a lack of coordination between the two markets could increase trading costs and operational challenges.

“A coordinated approach across Europe is desirable,” the EU statement noted, stressing the need for consensus on the timing of any move to T+1.