One year to go for T+1 settlement: the regulatory framework is complete, now let’s make it happen

For compliance teams, the most immediate deadline is 7 December 2026, when investment firms and their clients must meet new allocation and confirmation requirements. Firms should treat this as a cross-functional market infrastructure programme, not a back-office change: front-office trade capture, middle-office allocation and confirmation, post-trade messaging, settlement operations, client onboarding, and third-party vendor connectivity all need review. ESMA expects firms to assess readiness across their entire ecosystem and begin end-to-end testing early across the trading and settlement chain.

The newly published RTS and guidelines on standardised procedures and messaging protocols provide the technical baseline, while the EU T+1 Industry Committee recommendations should inform testing and governance. Key actions include mapping current T+2 workflows to T+1, validating vendor and counterparty readiness, updating client documentation and operational procedures, and evidencing testing to boards and supervisors. Risks include failed settlements, increased operational and liquidity pressure, client disputes, and uneven readiness among smaller counterparties.

Opportunities include improved settlement efficiency, reduced counterparty and market risk, and greater international competitiveness for EU markets. Executive sponsors should secure budget and cross-border coordination now; with around 12 months to go, late remediation will be costly.