Central Securities Depositories Regulation and T+2

CSDR and T+2: harmonising securities settlements practices in Europe

Post the 2008 financial crisis, the European Commission (EC) decided that national Central Securities Depositories (CSD), in their position as key institutions performing the vital post-trade process of securities settlement, as well as maintaining records of securities accounts and transactions, needed to harmonise their practices and improve the safety and efficiency of transaction settlement.


Download brochure: T+2 EU Industry wide shortened settlement cycle for securities (PDF 1MB)

Download brochure: T+2 EU Industry wide shortened settlement
cycle for securities


Latest updates

As of 6 June 2016, the situation is as follows:

  • 29 markets have migrated to T+2 settlement cycle: Austria, Belgium, Bosnia & Herzegovina, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Spaini, Sweden, Switzerland, and the UK.
  • 1 market has not yet fixed a date for migrating to T+2 (Liechtenstein).
  • 2 markets already use T+2: Bulgaria and Slovenia.
  • 1 market (Germany) is already using T+2 for exchange activity. OTC transactions are currently on T+3 and are recommended to move to T+2, as per ICMA guidelines.

What has driven this regulation?

National Central Securities Depositories (CSDs) are key institutions that perform the vital post-trade process of securities settlement. In addition, they hold records of securities accounts and transactions. Following the 2008 financial crisis, the European Commission (EC) decided that CSDs needed to harmonise their practices and improve the safety and efficiency of transaction settlement.

In the vast majority of European markets, the settlement period for securities is currently the transaction date plus three business days, often referred to as T+3. The move to T+2 and a shorter settlement cycle would mitigate counterparty risk for all industry participants.

The European Commission set up the Harmonisation of Settlement Cycles Working Group in 2009. The group decided that T+1 would not work due to the high use of paper and low levels of straight-through processing in the industry. The group therefore recommended T+2, which would harmonise with foreign exchange settlement periods.

T+2 will harmonise securities settlement periods at a maximum of two business days after the trading day, (T+2) for certain securities transactions across the EU).

What benefits are expected from T+2?

In essence, the migration to T+2 settlement period is expected to:

  • Reduce counterparty, market and liquidity risks
  • Increase automation of operations processes within all market participants' organisation
  • Reduce annual collateral requirements, therefore freeing up capital for investment.

How does T+2 impact your transactions?

  • Market participants will now have one less day to complete the pre-settlement stages of the trade lifecycle with even greater focus required on positively affirming trade details on trade date.
  • Operational functions will be subject to more focus across the industry in the coming months to ensure that firms are prepared for the new T+2 settlement cycle.
  • The impact of T+2 will not be confined to Europe. Market participants with clients or counterparties outside Europe will need to ensure that cross-border securities transactions (i.e. euro-based bonds settling cross border) are also settled on T+2.

What will market participants be expected to do?

  • Adapt their own procedures to complete the pre-settlement stages of the trade lifecycle more quickly.
  • Comply with ‘same day affirmation’ or ‘SDA’ (verification of the trade on the same day the trade is executed) where possible.
  • Improve exchange of information and use electronic / automated solutions when possible for communication, payment or cheque clearing.
  • Ensure that their cross-border securities transactions (e.g. euro based bonds settling cross border) are also settled on T+2 when trading with counterparties outside Europe.
  • Ensure internal system and process readiness to support changes to the settlement cycles in time for the main 6 October 2014 go-live date.


Last updated: 1 August 2016