Regulatory T+1 Takes Effect in Europe in December 2026

And of ESMA’s final report proposing a revision to the delegated regulation, a new milestone has just been reached with the European Commission’s adoption of ESMA’s proposal¹. Following the non-objection period (Parliament and Council), this new version of the delegated regulation governing settlement procedures is expected to be published in the Official Journal.

This will set in stone the December 7, 2026, deadline for the allocation/confirmation stage.

ESMA’s proposals had raised some eyebrows, particularly the one requiring by regulation that all settlement/delivery instructions—regardless of the nature of the underlying transaction or its settlement cycle—be submitted no later than 11:59 p.m. on the trading day. The French financial community (industry and regulators) had raised this issue, backed by concrete examples, with both ESMA and the European Commission. These efforts were successful, as the Commission softened the proposed requirement.

The 11:59 p.m. deadline on the trade date has been downgraded to a strong recommendation, and its rationale has also been reiterated: to take advantage of optimizations in overnight processing. Moreover, the 11:00 p.m. deadline on the trade date for the allocation/confirmation phase remains a regulatory requirement, thereby facilitating the timely generation of instructions. Finally, “as soon as possible” remains the guiding principle for the entire post-trade phase.

The requirement to send instructions on the same day as the trade is therefore set forth in Industry Committee Recommendation ST-01.01, and any failure to comply must be explained (“adhere or explain”). It is indeed essential, to maintain the current efficiency of settlement, to be present during the overnight cycles.

Regulatory Rollout Schedule (extract from the ESMA final report)

¹C(2026)4640 - Register of Commission Documents