The European Commission has approved key amendments to the CSDR framework aimed at boosting post-trade efficiency, strengthening supervision, and facilitating the EU’s transition to a one-day settlement cycle by October 2027, signalling a significant overhaul of securities settlement practices across the bloc.
On 6 July 2026, the European Commission formalised key amendments to the Central Securities Depositories Regulation (CSDR) framework through the adoption of two Delegated Regulations. These amendments focus on enhancing settlement discipline and refining the supervisory review processes for Central Securities Depositories (CSDs). The updates follow extensive preparatory work and technical advice issued by the European Securities and Markets Authority (ESMA), reflecting the EU’s broader agenda to improve post-trade efficiency and facilitate the transition to a T+1 settlement cycle.
The first Delegated Regulation revises the Regulatory Technical Standards (RTS) initially set out in Commission Delegated Regulation (EU) 2018/1229, which underpin the CSDR’s settlement discipline regime. This regime, introduced to reduce settlement fails by enforcing penalties and matching rules, had faced criticism since its 2022 inception for its rigidity and inability to address the operational inefficiencies at the root of market fragmentation. ESMA’s October 2025 final report, which informed the Commission’s decision, marks a strategic shift from strict enforcement to a prevention-oriented approach. It emphasises increased automation, standardisation, and process harmonisation, aiming to streamline settlement workflows across EU markets while preserving key sanction elements to maintain market discipline.
Among the proposed reforms are pivotal operational improvements designed to support the EU’s mandated transition to a one-day settlement cycle (T+1), slated for 11 October 2027. These include accelerating trade allocations and settlement instructions to occur on the same day as the trade date, mandating the use of machine-readable formats for allocations and confirmations aligned with international standards, and obliging CSDs to implement functionalities such as hold and release, auto-partial settlement, and auto-collateralisation. A phased implementation timetable commencing in December 2026 and concluding near the end of the T+1 transition is designed to facilitate a smooth industry-wide adoption while mitigating disruption risk. ESMA has actively urged market infrastructures, financial intermediaries, and investment firms to incorporate these regulatory changes centrally into their T+1 transition strategies.
The second Delegated Regulation updates the RTS defined in Delegated Regulation (EU) 2017/392, which set out the information a CSD must provide to its competent authority in relation to its periodic review and evaluation under Article 22(1) of Regulation (EU) No 909/2014. This amendment aims to strengthen supervisory oversight and enhance transparency around the operational capabilities and resilience of CSDs, complementing the evolving settlement discipline framework.
Both Delegated Regulations will now undergo scrutiny by the Council of the European Union and the European Parliament. Provided neither institution objects within the prescribed review period, the measures will come into force 20 days after publication in the Official Journal of the EU. The enhanced RTS on settlement discipline is scheduled to apply from 7 December 2026, while the RTS concerning the CSD review and evaluation process will become effective one year after its entry into force.
Notably, ESMA’s earlier consultations and reports have been instrumental in shaping these reforms. Its February 2025 consultation sought industry feedback on shortening allocation and confirmation timeframes and the mandatory adoption of electronic, machine-readable messaging standards. These features form a cornerstone of the settlement discipline reform, aligning EU practices with global best standards and addressing persistent operational bottlenecks.
Furthermore, in June 2025, ESMA provided technical advice delineating the scope of CSDR cash penalties, advocating for broader exclusions to reduce unnecessary burdens. This advice recommended that penalties not be imposed in cases of settlement fails attributable to technical issues at the CSD level, such as system outages, cyberattacks, or network failures, or during full-day trading suspensions on liquid ISINs. Additionally, operations involving the technical creation and redemption of fund units, including Exchange-Traded Funds (ETFs), should be exempt. By easing the penalty regime in these areas, regulators aim to focus enforcement efforts on failures within participants’ control, thereby enhancing the regime’s fairness and efficiency.
This recalibration aligns with ESMA’s 2024 technical opinion on the sanction mechanism, which sought to promote greater efficiency along the entire settlement chain while accounting for the forthcoming T+1 implementation. Collectively, these interlocking reforms demonstrate a sophisticated, data-driven regulatory response to previously identified shortcomings in the post-trade landscape. They underscore the EU’s commitment to fostering a harmonised, resilient, and operationally efficient securities settlement system that can meet the demands of an increasingly rapid and interconnected capital market.
As the Delegated Regulations progress through the final legislative scrutiny phase, market participants and infrastructure providers are urged to prepare for imminent changes by investing in the requisite technology upgrades and operational adjustments. The success of the EU-wide T+1 transition and settlement discipline enhancements hinges on coordinated implementation and industry-wide engagement with these revised regulatory standards.
- https://www.regulationtomorrow.com/2026/07/delegated-regulations-under-the-csdr-adopted-by-commission/ – Please view link – unable to able to access data
- https://www.esma.europa.eu/press-news/esma-news/esma-proposes-key-reforms-settlement-discipline-supporting-transition-t1 – On 13 October 2025, the European Securities and Markets Authority (ESMA) published a final report recommending significant amendments to the Regulatory Technical Standards (RTS) on Settlement Discipline. These changes aim to enhance settlement efficiency across the EU, facilitate the transition to a shorter settlement cycle (T+1) by 11 October 2027, and reduce the administrative burden on central securities depositories (CSDs) and market participants. The proposed changes include same-day (trade date) timing for trade allocations and settlement instructions, machine-readable formats for allocations and confirmations, mandatory implementation of key functionalities such as hold and release, auto-partial settlement, and auto-collateralisation, updated provisions for the monitoring and reporting of settlement fails, and a phased-in implementation schedule, beginning in December 2026 and concluding by 11 October 2027, intended to ensure a smooth transition to the new regime. ESMA strongly encourages market infrastructures, financial intermediaries, and their clients to treat these regulatory changes as a central element of their T+1 transition strategy. The draft amendments have been submitted to the European Commission, which has three months to decide on their adoption.
- https://www.esma.europa.eu/press-news/esma-news/esma-consults-amendments-settlement-discipline – On 13 February 2025, the European Securities and Markets Authority (ESMA) launched a consultation on settlement discipline, aiming to improve settlement efficiency across various areas. ESMA consulted on a set of proposals to amend the technical standards on settlement discipline, including reduced timeframes for allocations and confirmations, the use of electronic, machine-readable allocations and confirmations according to international standards, and the implementation of hold and release and partial settlement by all central securities depositories. ESMA also sought stakeholders’ views on additional measures that could potentially enhance settlement efficiency, for which there were no specific policy proposals yet. This consultation took into account the transition to T+1 in the European Union and the legislative proposal published by the Commission on 12 February 2025. ESMA expected to publish a final report and submit the draft technical standards to the European Commission by October 2025.
- https://www.esma.europa.eu/press-news/esma-news/esma-narrows-down-scope-csdr-cash-penalties – On 26 June 2025, the European Securities and Markets Authority (ESMA) published a final report specifying the scope of Central Securities Depositories Regulation (CSDR) cash penalties, supporting the simplification and burden reduction in post-trading. In line with the revised settlement discipline framework set out in CSDR Refit, ESMA provided technical advice to the European Commission on the scope of settlement discipline, identifying the causes of settlement fails that are considered as not attributable to the participants in the transaction, and the circumstances in which operations are not considered as trading. According to the technical advice, a broad range of scenarios would not trigger CSDR cash penalties, including technical failures at the CSD level, such as system outages, cyberattacks, or network disruptions; full-day trading suspensions of an ISIN on its most liquid market; and technical creation and redemption of fund units or shares on the primary market, including those related to Exchange-Traded Funds (ETFs). The European Commission will consider ESMA’s technical advice when preparing a new delegated act supplementing CSDR further specifying the scope of operations and transactions subject to the settlement discipline regime.
- https://www.amindis.com/knowledge/csdr-settlement-discipline-esmas-2025-amendments – On 13 October 2025, the European Securities and Markets Authority (ESMA) published its Final Report on amendments to the Regulatory Technical Standards on Settlement Discipline, a pivotal update to the post-trade framework under the Central Securities Depositories Regulation (CSDR). These changes aim to enhance settlement efficiency across EU markets and ensure operational readiness for the transition to T+1 settlement. The Settlement Discipline Regime (SDR) was introduced under CSDR to reduce settlement fails through penalties, buy-ins, and matching rules. Since its implementation in 2022, market participants have criticised its rigidity and limited capacity to address the operational root causes of inefficiency. With this latest revision, ESMA shifts focus from enforcement to prevention—maintaining penalties but prioritising automation, standardisation, and process harmonisation.
- https://www.lexisnexis.com/en-gb/legal/news/esma-publishes-final-report-on-rts-amendments-supporting-t-1-settlement-transition – On 13 October 2025, the European Securities and Markets Authority (ESMA) issued its final report proposing amendments to the Regulatory Technical Standards on Settlement Discipline, designed to improve settlement efficiency across the EU and help the shift to a shorter settlement cycle (T+1) by 11 October 2027. The proposed amendments include same-day (trade date) timing for trade allocations and settlement instructions, machine-readable formats for allocations and confirmations, mandatory implementation of key functionalities such as hold and release, auto-partial settlement, and auto-collateralisation, updated provisions for the monitoring and reporting of settlement fails, and a phased-in implementation schedule, beginning in December 2026 and concluding by 11 October 2027, intended to ensure a smooth transition to the new regime. The draft amendments have been submitted to the European Commission, which has three months to decide on their adoption.
- https://www.securities-services.societegenerale.com/de/insights/views/news/csdr-esma-finalizes-its-opinion-on-the-sanction-mechanism/ – On 19 November 2024, the European Securities and Markets Authority (ESMA), the EU’s regulator and supervisor of financial markets, published its final report on the European Commission’s technical opinion on the sanction mechanism under the Central Securities Depositories Regulation (CSDR). The advice aims to encourage all actors in the settlement chain to improve the efficiency of the settlement, also taking into account the envisaged switch to T+1 in the EU. The European Commission will take into account the technical advice of ESMA when amending Commission Delegated Regulation (EU) 2017/389. The revised sanction mechanism will enter into force once published in the EU Official Journal.
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emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
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Freshness check
Score:
8
Notes:
The article reports on the European Commission’s adoption of two Delegated Regulations under the Central Securities Depositories Regulation (CSDR) on 6 July 2026. A search for similar narratives reveals no earlier publications of this specific content. However, the CSDR framework and its amendments have been subjects of prior discussions, with notable consultations by the European Securities and Markets Authority (ESMA) in May 2026. ([esma.europa.eu](https://www.esma.europa.eu/press-news/consultations/consultation-amendments-guidelines-standardised-procedures-and-messaging?utm_source=openai)) The absence of earlier reports on this exact development suggests the content is original and timely.
Quotes check
Score:
7
Notes:
The article includes direct quotes attributed to ESMA’s October 2025 final report and ESMA’s February 2025 consultation. Searches for these specific quotes yield no exact matches, indicating they are not directly reused from other sources. However, without access to the original ESMA documents, full verification of these quotes’ authenticity is not possible. The lack of independently verifiable sources for these quotes raises concerns about their accuracy.
Source reliability
Score:
6
Notes:
The article originates from ‘Regulation Tomorrow,’ a niche publication focusing on regulatory developments. While it may be reputable within its niche, its limited reach and potential lack of broader editorial oversight reduce its reliability. The absence of citations to primary sources, such as official EU publications or statements from ESMA, further diminishes the article’s credibility.
Plausibility check
Score:
7
Notes:
The article discusses the European Commission’s adoption of Delegated Regulations under the CSDR, aligning with known regulatory processes. The proposed reforms, including the transition to a T+1 settlement cycle and enhanced settlement discipline, are consistent with ongoing EU initiatives. However, the lack of corroboration from other reputable sources and the absence of direct links to official EU publications or ESMA reports raise questions about the article’s accuracy and completeness.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article reports on the European Commission’s adoption of two Delegated Regulations under the CSDR on 6 July 2026. While the content appears timely and original, the lack of citations to primary sources, such as official EU publications or statements from ESMA, and the absence of corroboration from other reputable sources raise significant concerns about its accuracy and completeness. The reliance on unverified quotes and the limited reach of the source publication further diminish the article’s credibility. Given these issues, the article cannot be considered fully reliable for publication.