On the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 909/2014 as regards a shorter settlement cycle in the Union
A-10-2025-0095
Committee on Economic and Monetary Affairs · Rapporteur: Johan Van Overtveldt
- Voted on · Adopted 612–7–45 · See the decision →
- Full procedure 2025/0022
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Parliament's amended version of the proposed regulation shortens the mandatory settlement cycle for securities transactions on trading venues from T+2 to T+1, with exemptions for certain privately negotiated or bilaterally executed transactions and for securities financing transactions documented as single transactions composed of two linked operations.¶¶¶ It also amends reporting obligations for settlement fails and requires ESMA to monitor settlement efficiency, including for exempted securities financing transactions, and to report on the market impact of the exemption.¶¶¶ The regulation applies from 11 October 2027.¶
Committee position. The Committee on Economic and Monetary Affairs proposes to adopt the Commission proposal with amendments, including exemptions for certain transactions and a deferred application date.¶¶¶
Key points
- The intended settlement date for transactions in transferable securities executed on trading venues must be no later than the first business day after trading (T+1).¶
- The T+1 requirement does not apply to privately negotiated but venue-executed transactions, bilaterally executed but venue-reported transactions, or the first transaction in securities subject to initial book-entry recording.
- Securities lending, buy-sell back, sell-buy back, and repurchase transactions are exempt from T+1 if documented as single transactions composed of two linked operations.¶¶¶
- ESMA's reports on settlement efficiency must include categories of transactions, intended settlement dates, and whether transactions are traded on trading venues.¶
- ESMA must report on the market impact of and justification for the exemption for certain securities financing transactions.¶
- ESMA should monitor settlement efficiency during the move to T+1 and report more frequently immediately before and after, with particular attention to securities financing transactions.¶
- The Commission may adjust delegated rules on cash penalties if the move to T+1 risks a material increase in settlement fails, with temporary and proportionate adjustments.¶
- The regulation applies from 11 October 2027.¶
Who is affected
- Central securities depositories and market participants executing transactions on trading venues must comply with the T+1 settlement cycle.¶
- Parties to securities financing transactions (lending, buy-sell back, repurchase) are exempt from T+1 if documented as two linked operations.¶¶¶
- ESMA has new reporting and monitoring obligations regarding settlement efficiency and the exemption's impact.¶¶¶
Figures and deadlines
- 11 October 2027: date from which the regulation applies.¶
Legal basis: Article 114 of the Treaty on the Functioning of the European Union¶