CySEC Circular C797: ESMA's T+1 deadlines, 7 December 2026 and 11 October 2027

On 20 July 2026 ESMA published a statement on T+1 preparations (ESMA74-2119945926-3773). It reminds market participants that EU securities settlement moves from T+2 to T+1 on 11 October 2027 and sets two compliance deadlines: 7 December 2026 and 11 October 2027. ESMA adds that supervisors will monitor compliance once the new requirements take effect, and that Level 3 guidance on allocations and confirmations is close to final.

CySEC relayed the statement in Circular C797 of 26 August 2026. According to published summaries, the circular is addressed to CIFs, UCITS management companies, AIF managers, depositaries, trading venues and central securities depositories, and asks them to give their T+1 programmes priority and enough resources and to test end to end early.

The first deadline covers the first post-trade step: the exchange of allocations and confirmations. The detail is in a Commission Delegated Regulation amending the settlement discipline standards in Delegated Regulation (EU) 2018/1229, adopted on 6 July 2026 as C(2026) 4640. Under the adopted text, professional clients must send written allocations and confirmations in a structured electronic format, using international open communication standards, so that the investment firm receives them by 23:00 CET on trade date. The firm must acknowledge receipt within two hours, or within one hour of opening on the next business day if they arrive less than an hour before its close of business.

Retail clients must give their firm the settlement information it needs by the same 23:00 CET cut-off, unless they hold the instruments and cash with that firm. Firms must also require professional clients to supply settlement reference data in a standardised electronic format and keep it up to date.

The act enters into force 20 days after its publication in the Official Journal. When ESMA issued its statement, the Parliament and the Council were still scrutinising it, and we found no publication in the Official Journal as at 3 October 2026, so check the final text before relying on the exact wording.

Regulation (EU) 2025/2075, published in the Official Journal on 14 October 2025, amends Article 5(2) of the Central Securities Depositories Regulation (CSDR): transactions in transferable securities executed on trading venues must settle no later than the first business day after trading. It applies from 11 October 2027. Some transactions are excluded, such as privately negotiated trades executed on a venue and securities financing transactions documented as a single transaction, including repos and securities lending.

ESMA's second deadline falls on the same day. It covers sending settlement instructions to settlement systems early enough, and making CSD functions such as auto-partial settlement, hold and release, and auto-collateralisation generally available. Under the same amending Delegated Regulation, changes to settlement-fails monitoring and reporting, including a place-of-trading field in settlement instructions, apply from 1 July 2027.

ESMA's central message is that readiness must be checked along the whole chain, not only inside the firm. A CIF that executes or transmits orders in EU shares or bonds should map which clients send allocations, through which channel and at what time, and whether its brokers, custodians and technology vendors can work to a trade-date cut-off. UCITS management companies, AIF managers and depositaries should review their dealing, confirmation and settlement flows in the same way.

In practice, that means replacing manual or free-text allocation channels with structured messages, collecting and validating standard settlement instructions and reference data such as the place of settlement, updating client agreements and procedures for the 23:00 CET cut-off and two-hour acknowledgement, and booking joint tests with counterparties well before 7 December 2026.