What Changes and When?
Why are we already communicating about T+1 now?
The requirements for allocations and confirmations will apply from 7 December 2026. The actual transition to the T+1 settlement cycle will not take place until October 2027. These different implementation dates are currently generating many questions from clients.
The reason is that the regulatory requirements for the transmission and exchange of allocations and confirmations have been decoupled from the shortening of the settlement cycle and will be introduced in advance.
What changes from 7 December 2026?
7 December 2026 is the first important milestone of the T+1 initiative. Although the actual T+1 settlement cycle will only be introduced in October 2027, new regulatory requirements will already come into force on this date.
These requirements relate to the pre-settlement processes, particularly the exchange of allocations, where relevant to the client relationship, and confirmations between investment firms and their professional clients.
From this date onwards:
- Allocations and confirmations must be exchanged electronically and transmitted in a standardized, machine-readable format.
- The relevant information must be exchanged between the involved parties no later than 11:00 p.m. on the trade date (T).
For clients, this means that existing communication and coordination processes should be reviewed and, where necessary, migrated to electronic and standardized transmission channels. According to ESMA, from 7 December 2026 exclusively manual or unstructured transmission of allocations and confirmations, for example via fax, PDF documents, or unstructured email, will no longer meet regulatory requirements.
Who is meant by “Professional Clients”?
The regulation uses the term “Professional Client”, which refers to the MiFID II classification of professional clients. This category includes, among others, credit institutions. As a result, market participants classified as “Eligible Counterparties” are frequently affected in practice, either on the investment firm side or on the client side.
What changes from 11 October 2027?
With the European-wide go-live on 11 October 2027, the transition of the standard settlement cycle from T+2 to T+1 will take effect.
From this point onwards, the delivery of securities and the related payment will generally occur one business day after trade execution. Consequently, the timeframe for the entire post-trade process will be significantly shortened.
