T+1 Accelerated Settlement Transition | BNY
T+1 Accelerated
T+1 settlement transition information for Europe
The Frequently Asked Questions (FAQs) below are designed to help clients prepare for the transition in the U.K., the EU and Switzerland on October 11, 2027.
Following the shortening of the settlement cycle in the U.S., Canada and Mexico in May 2024, the European Union (EU), the European Economic Area (EEA), the U.K. and Switzerland have all confirmed their intention to transition to T+1 settlement on October 11, 2027.
There are clear benefits to doing so, including the earlier availability of securities and cash for buyers and sellers, lower credit risk and a reduction in the amount of margin that needs to be deposited with central counterparties (CCPs).
The impact of a shortened settlement cycle is still being assessed. However, it will clearly have a significant impact on pre- and post-trade activities of market infrastructure, market participants and everyone along the custody chain, meaning stakeholders will need to review and assess their operating models, processing activities and technical capabilities.
In the U.K., the Accelerated Settlement Taskforce (AST) was established to assess the case for the transition to T+1. The taskforce is composed of representatives of trading, clearing and settlement entities, custodians, registrars, investment managers, brokers, law firms, consultancies and numerous intermediaries from the U.K. market. Some industry associations are members of the AST as well, including U.K. financial regulatory bodies (as observers). These associations include the European Association of CCP Clearing Houses (EACH), the European Central Securities Depositories Association (ECSDA) and the European Fund and Asset Management Association (EFAMA).
The AST is composed of an Oversight Committee, five main workstreams (Operations, Alignment, Trading & Liquidity, Lessons from the U.S. move, Legal & regulatory), and 13 sub-streams.
BNY is represented on the Oversight Committee as well as in the various workstreams and sub-streams.
In the EU, a governance structure has been established by the European Securities and Markets Authority (ESMA), the European Commission (EC) and the European Central Bank (ECB) in order to ensure that a proper evaluation is conducted because of the number of member states as well as the fact that there are multiple trading venues, central counterparties, central securities depositories and central banks.
The governance structure includes the EU’s T+1 Coordination Committee, T+1 Industry Committee and 12 technical workstreams responsible for specific topics. The workstreams are: Scope; Legal & Regulatory; Trading; Matching & Confirmation; Clearing; Settlement; FX; Securities Financing Transactions; Asset Management; Settlement Efficiency; Corporate Events; and Operational Timetable. Each workstream has two co-leads.
The T+1 Coordination Committee is mainly composed of representatives of EU authorities (ESMA, ECB, European Commission, National Competent Authorities, etc.), while the T+1 Industry Committee is composed of representatives of industry associations and the workstream co-leads, with the EU authorities present as observers. The Independent Chair of the T+1 Industry Committee ensures the flow of communication between the two committees.
Roberto De Paolis, Direct Markets Director at BNY, is the co-lead of the Scope workstream and has a seat on the T+1 Industry Committee. BNY is also represented in all 12 workstreams and the related taskforces.
The following markets are transitioning to T+1 on October 11, 2027:
- The 27 Member States of the European Union: Austria (EUR), Belgium (EUR), Bulgaria (EUR from January 1, 2026), Croatia (EUR), Cyprus (EUR), Czech Republic (CZK), Denmark (DKK) , Estonia (EUR), Finland (EUR), France (EUR), Germany (EUR), Greece (EUR), Hungary (HUF), Ireland (EUR), Italy (EUR), Latvia (EUR), Lithuania (EUR), Luxembourg (EUR), Malta (EUR), the Netherlands (EUR), Poland (PLN), Portugal (EUR), Romania (RON), Slovakia (EUR), Slovenia (EUR), Spain (EUR) and Sweden (SEK);
- European Economic Area, which includes the 27 Member States of the European Union as well as: Iceland (ISK), Liechtenstein (CHF) and Norway (NOK);
- The U.K. (GBP); and
- Switzerland (CHF).
The Central Securities Depositories Regulation (CSDR) is the regulation that defines the settlement cycle. It is an EU regulation that introduces measures for the authorization and regulation of the EEA’s CSDs (central securities depositories). Article 5.2 refers to “the intended settlement date shall be no later than on the second business day after the trading takes place.” This provision will change in both the EU CSDR and U.K. CSDR to read “the intended settlement date shall be no later than on the first business day after the trading takes place.”
It is expected that the U.K., the EU (and the EEA), Switzerland and Liechtenstein will proceed on October 11, 2027, with a “big bang” transition.
The Scope workstream of the T+1 Industry Committee (co-led by BNY) has defined the recommended scope of the T+1 settlement cycle in CSDR Art. 1 and Art. 5.2 as applying to “transactions in transferable securities traded on an EU trading venue and settling in an EU-registered CSD.” A similar concept applies to the U.K. CSDR.
The following transaction categories are already excluded from the application of the EU and U.K. CSDR:
- Transactions which are negotiated privately but executed on a trading venue;
- Transactions which are executed bilaterally but reported to a trading venue; and
- The first transaction where the transferable securities concerned are subject to initial recording in book-entry form.
Both the U.K. and EU Legal workstreams have proposed that Securities Financing Transactions be excluded from the move to T+1. The EU authorities are discussing the possibility of exempting the following securities financing transactions, provided they are documented as single transactions composed of two linked operations:
- Securities lending or securities borrowing as defined in Art. 3 (7) of Regulation (EU) 2015/2365 of the European Parliament and of the Council;
- Buy-sell back transactions or sell-buy back transactions as defined in Art. 3 (8) of Regulation (EU) 2015/2365; and
- Repurchase transactions as defined in Art. 3 (9) of Regulation (EU) 2015/2365
The main expected benefits for the industry and clients are as follows:
- Buyers and sellers will receive their cash or securities a day earlier;
- Reduction of counterparty credit risk;
- Reduction of margin requirements (as demonstrated by the U.S. transition);
- Greater efficiency because of the technology changes and improved operational processes needed to support T+1;
- Increased automation.
BNY provides a wide range of products that can support clients during their journey to T+1, including execution services, middle and back-office capabilities, settlement services, asset servicing (including corporate actions and taxes), FX services, securities lending capabilities, data & analytics solutions providing predictive analytics, and liquidity management.
Yes, BNY’s FX capabilities are fully designed to operate in accelerated settlement cycles, not only through our delegated FX programs, but also via our negotiated sales desks globally.
While securities lending transactions may be excluded from the mandatory move to T+1 – either due to regulatory scope or because they are typically traded off-venue – recalls will still transition to a T+1 cycle. This change is necessary to support timely settlement of client sales.
To enable the recall process within a full settlement cycle, it remains critical for client sale instructions to be received promptly after trading. Where permitted, partial settlement can also help minimize settlement fails.
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In the UK., a number of services associated with BNY Wealth's Family Office Services – International are provided through The Bank of New York Mellon, London Branch. The Bank of New York Mellon also operates in the UK through its London branch (UK companies house numbers FC005522 and BR000818) at BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA, UK and is subject to regulation by the Financial Conduct Authority (FCA) at 12 Endeavour Square, London, E20 1JN, UK and limited regulation by the PRA at The Bank of England, Threadneedle St, London, EC2R 8AH, UK. Details about the extent of our regulation by the PRA are available from us on request.
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The Bank of New York Mellon SA/NV operates in Ireland through its Dublin branch at Riverside II, Sir John Rogerson's Quay Grand Canal Dock, Dublin 2, D02KV60, Ireland and is registered with the Companies Registration Office in Ireland No. 907126 & with VAT No. IE 9578054E. The Bank of New York Mellon SA/NV, Dublin Branch is subject to additional regulation by the Central Bank of Ireland for Depository Services and for conduct of business rules.
The Bank of New York Mellon SA/NV operates in Germany as The Bank of New York Mellon SA/NV, Asset Servicing, Niederlassung Frankfurt am Main, and has its registered office at MesseTurm, Friedrich-Ebert-Anlage 49, 60327 Frankfurt am Main, Germany. It is subject to limited additional regulation by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, Marie-Curie-Str. 24-28, 60439 Frankfurt, Germany) under registration number 122721.
The Bank of New York Mellon SA/NV operates in Poland as The Bank of New York Mellon SA/NV (Joint-stock Company) Branch in Poland with Statistical Number 524311310, whose registered office is at Sucha 2, 50-086 Wroclaw, Poland. The Bank of New York Mellon SA/NV (Joint-stock Company) Branch in Poland is a non-contracting branch.
The Bank of New York Mellon SA/NV operates in the Netherlands through its Amsterdam branch at Tribes SOM2 Building, Claude Debussylaan 7, 1082 MC Amsterdam,, the Netherlands. The Bank of New York Mellon SA/NV, Amsterdam Branch is subject to limited additional supervision by the Dutch Central Bank (“De Nederlandsche Bank” or “DNB”) on integrity issues only (registration number 34363596). DNB holds office at Westeinde 1, 1017 ZN Amsterdam, the Netherlands.
The Bank of New York Mellon SA/NV operates in Luxembourg through its Luxembourg branch at 2-4 rue Eugene Ruppert, Vertigo Building – Polaris, L- 2453, Luxembourg. The Bank of New York Mellon SA/NV, Luxembourg Branch is subject to limited additional regulation by the Commission de Surveillance du Secteur Financier at 283, route d’Arlon, L-1150 Luxembourg for conduct of business rules, and in its role as UCITS/AIF depositary and central administration agent.
The Bank of New York Mellon SA/NV operates in France through its Paris branch at 7 Rue Scribe, Paris, Paris 75009, France. The Bank of New York Mellon SA/NV, Paris Branch is subject to limited additional regulation by Secrétariat Général de l’Autorité de Contrôle Prudentiel at Première Direction du Contrôle de Banques (DCB 1), Service 2, 61, Rue Taitbout, 75436 Paris Cedex 09, France (registration number (SIREN) Nr. 538 228 420 RCS Paris - CIB 13733).
The Bank of New York Mellon SA/NV operates in Italy through its Milan branch at Via Mike Bongiorno no. 13, Diamantino building, 5th floor, Milan, 20124, Italy. The Bank of New York Mellon SA/NV, Milan Branch is subject to limited additional regulation by Banca d’Italia - Sede di Milano at Divisione Supervisione Banche, Via Cordusio no. 5, 20123 Milano, Italy (registration number 03351).
The Bank of New York Mellon SA/NV operates in Denmark as The Bank of New York Mellon SA/NV, Copenhagen Branch, filial af The Bank of New York Mellon SA/NV, Belgien, and has its registered office at Tuborg Boulevard 12, 3. DK-2900 Hellerup, Denmark. It is subject to limited additional regulation by the Danish Financial Supervisory Authority (Finanstilsynet, Århusgade 110, 2100 København Ø).
The Bank of New York Mellon SA/NV operates in Spain through its Madrid branch with registered office at Calle José Abascal 45, Planta 4ª, 28003, Madrid, and enrolled on the Reg. Mercantil de Madrid, Tomo 41019, folio 185 (M-727448). The Bank of New York Mellon, Sucursal en España is registered with Banco de España (registration number 1573).
The Bank of New York Mellon SA/NV operates in England through its London branch at 160 Queen Victoria Street, London EC4V 4LA, UK, registered in England and Wales with numbers FC029379 and BR014361. The Bank of New York Mellon SA/NV, London branch is authorized by the ECB (address above) and is deemed authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.
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