CySEC Informs Firms as EU Commission Targets T+1 Securities Settlement by 2027

2025-04-10T18:36:35.783+02:00

Thursday, 10/04/2025 | 16:36 GMT by
Tareq Sikder

The regulator issued a circular to CIFs, trading venues, and fund managers, outlining the changes.
At CySEC, a governance structure, including a T+1 committee and workstreams, will be established to manage the transition.

The European Commission has proposed moving to a one-day
(T+1) settlement cycle for securities transactions across the EU, shortening
the current two-business-day (T+2) standard. This marks a significant shift in
European capital markets.

The Cyprus Securities and Exchange Commission (CySEC) has
already issued a circular to local market participants, outlining the expected
changes and their implications. The circular was addressed to Cyprus Investment
Firms (CIFs), Alternative Investment Fund Managers, trading venues, and Central
Securities Depositories, CyprusMail reported.

EU Targets T+1 Settlement, CySEC Responds

The proposal follows the final report from the European
Securities and Markets Authority (ESMA) and involves amendments to the
regulation on central securities depositories (CSDR). The Commission has set 11
October 2027 as the target date for the transition.

The proposed T+1 cycle would apply to all EU transactions in
transferable securities, including shares and bonds traded on EU trading
venues. According to CySEC, the change aims to enhance post-trade efficiency
and market resilience.

CySEC stated: “The move to T+1 aims to strengthen the
efficiency and competitiveness of post-trade financial market services in the
EU.” The Commission also highlighted that the change could reduce costs and
risks, while helping to prevent market fragmentation and misalignment with
global standards.

You may want to read at financemagnates.com : ESMA
to Upgrade Systems as EU Aims for T+1 Settlement.

EU Transition Triggers CySEC Governance Changes

Given the complexity of the transition, a governance
structure will be established. It will include a T+1 coordination committee, an
industry committee, and several workstreams to define the processes and
standards for the shift.

Separately, CySEC informed CIFs of an amendment to ICT and
security risk guidelines issued by the European Banking Authority. The
amendment, published on 11 February 2025, reflects new EU-wide requirements
introduced under the Digital Operational Resilience Act (DORA), effective since
mid-January 2025. As a result, certain sections of the earlier guidelines have
been removed.

CySEC clarified that CIFs are no longer required to comply
with the previous framework and has withdrawn earlier circulars that aligned
local rules with the now-removed provisions.

EU Targets T+1 Settlement, CySEC Responds

You may want to read at financemagnates.com : ESMA
to Upgrade Systems as EU Aims for T+1 Settlement.

EU Transition Triggers CySEC Governance Changes

CySEC clarified that CIFs are no longer required to comply
with the previous framework and has withdrawn earlier circulars that aligned
local rules with the now-removed provisions.