Sittings · Document

Draft report (COM(2025)0038 – 2025/0022(COD)) 2025-04-30

Amendment of Regulation (EU) No 909/2014 as regards a shorter settlement cycle in the Union

Committee on Economic and Monetary Affairs

Amendment 1

Fabio De Masi

Proposal for a regulation

Recital 2

Text proposed by the Commission	Amendment
(2) Longer settlement periods for transactions in transferable securities increase risks for transaction parties and reduce opportunities for buyers and sellers to enter into other transactions. For those reasons, many third-country jurisdictions have moved, are in the process of moving, or plan to move, to a settlement period of one business day after the trade (‘T+1’). The global shift to shorter settlement periods is, however, creating misalignments between Union and global financial markets. Those misalignments will only further increase when more countries move to T+1 settlement and increase the cost caused by such misalignments for Union market participants.	(2) Longer settlement periods for transactions in transferable securities increase risks for transaction parties and reduce opportunities for buyers and sellers to enter into other transactions. For those reasons, many third-country jurisdictions have moved, are in the process of moving, or plan to move, to a settlement period of one business day after the trade (‘T+1’). The global shift to shorter settlement periods is, however, creating misalignments between Union and global financial markets. Those misalignments will only further increase when more countries move to T+1 settlement and increase the cost caused by such misalignments for Union market participants. Furthermore, in some important international market places the settlement cycle has already been further shortened to T+0 while the Target2-Securities infrastructure of the European Central Bank even operates on a real-time basis.

Or. en

Amendment 2

Auke Zijlstra

Proposal for a regulation

Recital 2 a (new)

Text proposed by the Commission	Amendment
	(2 a) Shorter settlement cycles could lead to more complicated cash-management for traders with a foreign exchange component, since currency markets work on two-day settlement.

Or. en

Amendment 3

Auke Zijlstra

Proposal for a regulation

Recital 2 b (new)

Text proposed by the Commission	Amendment
	(2 b) Shorter settlement cycles shortens the time period to resolve processing errors, including a shorter window for sourcing liquidity from the securities-lending market to cover short positions, which could be particularly impactfull for less-liquid stocks and for short sales occuring late in the trading day.

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Amendment 4

Auke Zijlstra

Proposal for a regulation

Recital 3 a (new)

Text proposed by the Commission	Amendment
	(3 a) However, as the market adapts to the new shorter settlement regime, there could be an initial spike in delayed and failed trades, which entails a serious liquidity risk and would significantly raise costs. That could in turn lead to regulatory fines under the CSDR and punitive buy-on costs imposed by clearing houses, which would be compensated by liquidity providers by quoting wider prices, which would run counter to the aim of making European capital markets more competitive.

Or. en

Amendment 5

Auke Zijlstra

Proposal for a regulation

Recital 4

Text proposed by the Commission	Amendment
(4) It is therefore appropriate to introduce a targeted amendment to Regulation (EU) 909/2014 in order to shorten the current mandatory settlement cycle to one day after the trading takes place. Such shortening of the settlement cycle would not prevent central securities depositories from voluntarily settling transactions on the same date as the trade date, where technologically capable.	(4) It is therefore appropriate to introduce a targeted amendment to Regulation (EU) 909/2014 in order to shorten the current mandatory settlement cycle to one day after the trading takes place. That mandatory settlement cycle should not be applicable to securities financing transactions as defined in Article 3(11) of Regulation (EU) 2015/2365 given the non-standardised nature of this specific type of transactions. The shortening of the settlement cycle would not prevent central securities depositories from voluntarily settling transactions on the same date as the trade date, where technologically feasible.

Or. en

Amendment 6

Markus Ferber

Proposal for a regulation

Recital 4 a (new)

Text proposed by the Commission	Amendment
	(4 a) Securities financing transactions allow market participants to manage their liquidity and funding needs in a flexible manner. Market trends indicate a growing use of this type of transactions on trading venues. Given the non-standardised nature of this specific type of transactions and in particular the non-standardised settlement periods that may need to be agreed to by the parties to such transactions to achieve their objectives, and to avoid discouraging their execution on trading venues, these transactions should be exempted from the T+1 settlement cycle requirement. However, as regards buy-sell back and sell-buy back transactions, to avoid any risks of circumvention of the T+1 settlement cycle requirement, an exemption should apply only if those transactions are documented as single operations composed of two linked transactions. Undocumented buy-sell back and sell-buy back transactions should be treated as regular securities transactions and thus should be subject to the T+1 settlement cycle requirement. Furthermore, margin lending transactions are already excluded from the scope of the requirement, as they do not involve transactions in transferable securities, and therefore fall outside the scope of Regulation (EU) No 909/2014.

Or. en

Amendment 7

Markus Ferber

Proposal for a regulation

Recital 4 b (new)

Text proposed by the Commission	Amendment
	(4 b) Regulation (EU) No 909/2014 provides for various measures to address settlement fails, including cash penalties imposed on failing participants. The calculation of those cash penalties is determined by parameters specified in Commission Delegated Regulation (EU) 2017/3891a. The Commission is expected to follow the market developments and the readiness of the industry to comply with T+1 settlement and consider accordingly whether there is a significant risk that the move from a T+2 to a T+1 settlement cycle could lead to a material increase in settlement fails. Where such a risk is identified, the Commission might, where necessary, consider to temporarily adjust Delegated Regulation (EU) 2017/389 accordingly, or to take any other appropriate measure within the scope of the empowerments set out in Regulation (EU) No 909/2014.
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	1a Commission Delegated Regulation (EU) 2017/389 of 11 November 2016 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council as regards the parameters for the calculation of cash penalties for settlement fails and the operations of CSDs in host Member States (OJ L 65, 10.3.2017, p. 1, ELI: http://data.europa.eu/eli/reg_del/2017/389/oj).

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Amendment 8

Fabio De Masi

Proposal for a regulation

Recital 7 a (new)

Text proposed by the Commission	Amendment
	(7 a) The Commission should further explore the feasibility of shortening the settlement cycle in the future to T+0. It should therefore review this Regulation no later than 36 months after its entry into force to ensure that the regulation and market infrastructures in the Union align with the increasing scope and pace of global financial markets and best practices of other international regulatory regimes. A settlement cycle of T+0 is already technically feasible and might be further facilitated by innovations such as the distributed ledger technology while ensuring safety of data and transparency. A further shortening of the settlement cycle would reduce risks of illegal and collusive trading schemes such as dividend stripping (“Cum-Ex”).

Or. en

Amendment 9

Markus Ferber

Proposal for a regulation

Article 1 – paragraph 1

Regulation (EU) No 909/2014

Article 5 – Paragraph 2

Text proposed by the Commission	Amendment
2. As regards transactions in transferable securities referred to in paragraph 1 which are executed on trading venues, the intended settlement date shall be no later than on the first business day after the trading takes place. That requirement shall not apply to transactions which are negotiated privately but executed on a trading venue, to transactions which are executed bilaterally but reported to a trading venue or to the first transaction where the transferable securities concerned are subject to initial recording in book-entry form pursuant to Article 3(2)..	2. As regards transactions in transferable securities referred to in paragraph 1 which are executed on trading venues, the intended settlement date shall be no later than on the first business day after the trading takes place. That requirement shall not apply to any of the following:
	(a) transactions which are negotiated privately but executed on a trading venue;
	(b) transactions which are executed bilaterally but reported to a trading venue;
	(c) the first transaction where the transferable securities concerned are subject to initial recording in book-entry form pursuant to Article 3(2);
	(d) securities financing transactions, as defined in Article 3, point (11), of Regulation (EU) 2015/2365 of the European Parliament and of the Council1b.
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	1b Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (OJ L 337, 23.12.2015, p. 1, ELI: http://data.europa.eu/eli/reg/2015/2365/oj).

Or. en

Justification

Exemption of securities financing transactions from the scope of the T+1 requirement.

Amendment 10

Auke Zijlstra

Proposal for a regulation

Article 1 – paragraph 1

Regulation (EU) No 909/2014

Article 5, paragraph 2

Text proposed by the Commission	Amendment
2. As regards transactions in transferable securities referred to in paragraph 1 which are executed on trading venues, the intended settlement date shall be no later than on the first business day after the trading takes place. That requirement shall not apply to transactions which are negotiated privately but executed on a trading venue, to transactions which are executed bilaterally but reported to a trading venue or to the first transaction where the transferable securities concerned are subject to initial recording in book-entry form pursuant to Article 3(2)..	2. As regards transactions in transferable securities referred to in paragraph 1 which are executed on trading venues, the intended settlement date shall be no later than on the first business day after the trading takes place. That requirement shall not apply to securities financing transactions as defined in Article 3, point (11), of Regulation (EU) 2015/23651a, to transactions which are negotiated privately but executed on a trading venue, to transactions which are executed bilaterally but reported to a trading venue or to the first transaction where the transferable securities concerned are subject to initial recording in book-entry form pursuant to Article 3(2).
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	1a Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (OJ L 337, 23.12.2015, p. 1, ELI: http://data.europa.eu/eli/reg/2015/2365/oj).

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