The task force charged with steering the European Union’s approach to shortening the settlement cycle to T+1 has called for a co-ordinated approach with the UK and Switzerland.
The statement – from the consortium of industry associations which make up the group – comes in response to the UK revealing plans to move to T+1 by the end of 2027. In the UK’s plans, its own committee did note that if the EU commits to move to T+1 within a timeframe that aligns with the UK’s plans, simultaneous adoption should be considered.
The EU task force has now said there is a significant opportunity to work collaboratively with the proposed UK Technical Group on a co-ordinated shift, in a bid to minimise disruption.
“We anticipate that alignment of dates will reduce the complexity of implementation projects for firms active across multiple jurisdictions, and minimise scoping issues related to instruments listed, traded and settled across geographical Europe,” the European task force said in a statement.
“Our shared ambition is for a low-cost, efficient, safe, resilient and integrated post-trade environment which supports globally competitive European securities markets, with high levels of automation and standardisation.”
The EU task force contains representation from industry associations representing all types of market participant, including buy-side, sell-side and market infrastructures.
To date, the group has conducted analysis on the potential impacts and challenges for European players from the North American migration to T+1 taking place in May 2024 and some initial factfinding across different subgroups about impacts of a potential EU move to T+1.
In mid-March, the European Securities and Markets Authority (ESMA) published its own report on the feedback received to its call for evidence on shortening the settlement cycle, where it received 81 responses from associations.
Despite confirming it will not pursue a leapfrog shift to T+0, the regulator only revealed it will continue to engage with the industry and will seek to publish another report before 17 January 2025.