The European Securities and Markets Authority (ESMA), European Commission (EC) and European Central Bank (ECB) have launched a new governance structure to support the transition to T+1 settlement within the EU.
The new governance structure has been developed to oversee and manage the operational, regulatory and technological elements of the transition.
Due to the ‘significant’ interconnectedness within the EU capital market, a coordinated approach across the EU, involving authorities, market participants, financial market infrastructures and investors, is desirable, according to the watchdogs.
Among the key elements the governance model seeks to establish is an industry committee, made up of senior leaders and representatives from market players.
This committee will be chaired by Giovanni Sabatini, who has previously served as a member of the European Economic and Social Committee and held roles within International Organisation of Securities Commissions (IOSCO), European Banking Federation (EBF) and European Central Securities Depositories Association (ECSDA).
The governance model also seeks to establish various technical workstreams, focused on the technological adaptations needed to accommodate the transition to T+1.
The watchdogs added that two more general workstreams will also be established to review the scope and the legal and regulatory aspects of these adaptations.
Lastly, a coordination committee will be established, chaired by ESMA and with representation from the EC, the ECB and the chair of the industry committee.
This committee will be tasked with ensuring coordination between the authorities and the industry, advising on any issue that may occur during the transition.
The first meeting of the coordination committee is scheduled for 6 February.
ESMA has suggested 11 October 2027 as the optimal date for the transition to T+1 in the EU, aligning with the UK’s proposed switch and today, 23 January, Switzerland also announced plans to move to T+1 in October 2017, with the date now being a consensus between the EU, Switzerland and the UK.