The European Securities and Markets Authority (ESMA) has launched a consultation process regarding updated guidelines on standardised procedures and messaging protocols.

This initiative is a critical component of the regulator’s broader strategy to support market participants as they prepare for the transition to a T+1 settlement cycle.

In a T+1 settlement cycle, the process of transferring securities to the buyer and the payment to the seller is completed within one business day after the execution of the trade, significantly shortening the standard two-day period.

The proposed updates are intended to render post trade communication faster, more consistent, and clearer across the European Union.

These revisions directly reflect amendments proposed in the final report on the Regulatory Technical Standards on Settlement Discipline and are designed to assist firms in meeting the stricter timelines associated with the move to T+1.

A central feature of these changes involves reflecting the mandatory use of electronic, standardised communication channels alongside international messaging standards.

Furthermore, the guidelines propose removing references to non-electronic and non-machine-readable communication methods, such as oral allocations and confirmations, unless temporary technical disruptions occur.

The revised guidelines are scheduled to apply from December 07, 2026, aligning with the anticipated application date of new requirements for allocations and confirmations under the Regulatory Technical Standards on Settlement Discipline.

The financial markets regulator has opened the consultation ahead of formal endorsement by the European Commission to ensure stakeholders have sufficient time to offer feedback and adjust their operational frameworks.

The authority has emphasised the importance of industry readiness for the regulatory transition to the T+1 settlement cycle, which is set to take effect on October 11, 2027.

Market participants are strongly urged to continue their preparations to ensure they meet these new requirements well before the official deadline.

Stakeholders are invited to submit their feedback by July 07, 2026.

The authority will subsequently evaluate the responses and expects to publish the final report containing the updated guidelines by October 2026.

This effort is part of the work conducted by the regulator to facilitate a seamless market transition.

Ensuring the industry is fully prepared remains a top priority, according to the EU financial markets regulator.