ESMA revises CSDR guidelines on allocations and confirmations ahead of 7 December 2026

On 16 October 2026 ESMA published its final report on the revised guidelines on standardised procedures and messaging protocols used between investment firms and their professional clients (ESMA74-2119945926-3749). CSDR, the Central Securities Depositories Regulation, requires investment firms to agree arrangements with professional clients for the prompt allocation and confirmation of trades, and asks ESMA to issue guidelines on the procedures and messaging protocols they use. The original guidelines date from October 2019. ESMA consulted on the changes from the end of May to the beginning of July 2026.

The revision brings the guidelines into line with Commission Delegated Regulation (EU) 2026/1536, which amends the settlement discipline rules and was published in the Official Journal on 14 October 2026 (see our study note on order handling for the wider client order rules). The revised guidelines apply from 7 December 2026, the same day as the amended rules on allocations and confirmations. They will first be translated into all EU languages and published on ESMA's website, and the specific guidelines they amend are repealed when the revised versions take effect.

ESMA refused requests for a transitional period until the end of March 2027. It explains that the underlying rules apply on 7 December 2026 regardless, and that delaying the guidelines could be read as an implicit delay of those rules. In its press release of the same day, ESMA said the regulatory framework for the EU's switch to T+1 settlement on 11 October 2027 is now complete.

The guidelines are addressed to investment firms and their competent authorities, so in Cyprus to CIFs and CySEC. They cover relationships between an investment firm and a professional client within the scope of MiFID II, and transactions in the instruments listed in Article 5(1) of CSDR: transferable securities, money-market instruments, units in collective undertakings and emission allowances. ESMA stresses that this scope is wider than the T+1 settlement requirement.

A client on the list of per se professional clients in Section I of Annex II to MiFID II counts as a professional client for these purposes, even if the firm has categorised it as an eligible counterparty or as a retail client (see our study note on client categorisation). Where two investment firms trade with each other, they should analyse their roles in the transaction to decide which acts as the firm and which as the client. Persons outside MiFID II, such as those exempted under its Article 2, are not covered.

Guideline 1 says investment firms should ensure that they and their professional clients comply with the CSDR requirements. The arrangements should be agreed contractually, but they may be documented in any legally binding form. The MiFID II client agreement is one possible place for them, not a requirement, and it is for firms and clients to decide whether their existing contracts need to change.

Under Guideline 3, the firm should agree with each professional client the electronic standardised communication method and the international open communication procedures and standards for messaging and reference data that they will use as a regular practice. E-mail and graphical user interfaces such as client portals are given as examples, provided the content of the allocation or confirmation is structured so that software can identify and extract the data. ESMA accepts that portals with manual input may suit professional clients with low volumes or smaller firms if the output is machine-readable, but expects high-volume clients to limit manual intervention. ESMA does not prescribe a particular message standard or file format.

The parties may still agree to send both an allocation and a confirmation, to include the confirmation in the allocation, or to send neither where the firm already has the settlement information in time, for example through access to a centralised database. The option to give this information orally has been removed. The guidelines also leave it to the parties to agree the consequences of late allocations, allocations in the wrong format or by the wrong method, and allocations never sent, because CSDR and the settlement discipline rules do not set them.

Guideline 4 now limits non-electronic channels to emergencies. Firms and professional clients should agree that, during a duly documented temporary technical unavailability or service disruption affecting either party, other written methods such as post, fax or non-machine-readable electronic means will be accepted. They may also agree to use phone calls if these are recorded under MiFID II's rules on recording client communications (see our study note on recording client communications). ESMA strongly recommends that post and fax be the least preferred contingency options.

Firms should ensure that their professional clients use international open communication procedures and standards as defined in CSDR. The former option for a professional client to choose an internal or domestic messaging standard has been deleted, because ESMA considers such standards incompatible with the amended rules. These guidance points sit on top of binding requirements in Delegated Regulation (EU) 2026/1536: from 7 December 2026 professional clients must send allocations by a structured electronic method, firms must require them to use international open standards, unstructured methods are permitted only during a documented temporary outage, and allocations and confirmations must reach the firm by 23:00 CET on trade date.

Under Article 16(3) of the ESMA Regulation, competent authorities and firms must make every effort to comply with the guidelines. Within two months of their publication in all EU official languages, each national competent authority must tell ESMA whether it complies or intends to comply, and give reasons if it does not. Firms do not have to report whether they comply, but supervisors that apply the guidelines are expected to check compliance through supervision. The report also cites an EU T+1 Industry Committee readiness survey in which 56% of respondents could be late in issuing allocations and confirmations on trade date by the end of 2026.

With seven weeks to go, CIFs that carry out transactions in securities with or for professional clients should list each client's current allocation and confirmation channel, retire oral and domestic-format channels, confirm that e-mail and portal flows deliver machine-readable data, and record the agreed method, standard and outage fallback in a legally binding document. Firms should also check whether clients categorised as eligible counterparties are per se professional clients, and test the end-to-end flow with clients and custodians before 7 December 2026 (see our study note on organisational requirements).