The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has launched a consultation on settlement discipline, with the objective of improving settlement efficiency across various areas.

ESMA is consulting on a set of proposals to amend the technical standards on settlement discipline that include:

• reduced timeframes for allocations and confirmations,
• the use of electronic, machine-readable allocations and confirmations according to international standards, and
• the implementation of hold & release and partial settlement by all central securities depositories.

ESMA also wants to gather stakeholders’ views on additional measures that could potentially enhance settlement efficiency, for which there are no specific policy proposals yet.This consultation takes into account the transition to T+1 in the European Union and the legislative proposal published by the Commission on 12 February 2025.  It is aligned with the roadmap outlined in ESMA’s Final Report on Shortening the Settlement Cycle.

Next steps

ESMA will consider the feedback to this consultation until 14 April 2025 and expects to publish a final report and submit the draft technical standards to the European Commission (EC) by October 2025.

Source: ESMA