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Europe is preparing to shorten securities settlement from two business days to one on Oct. 11, 2027. In a speech on Oct. 29, ECB Executive Board member Piero Cipollone said the change will require coordinated market preparations and T2S process updates, while the Eurosystem develops ways to support tokenised finance. The transition is planned, not yet complete; testing and implementation remain ahead.
Europe plans to move securities settlement from two days to one on Oct. 11, 2027, ECB Executive Board member Piero Cipollone said in a keynote address in Frankfurt on Oct. 29. The shift, known as T+1, is intended to shorten the time between a securities trade and the exchange of the asset and payment, and will require market participants and public authorities to prepare for tighter post-trade deadlines.
Cipollone told an EU T+1 Industry Committee event that Europe is less than a year from the planned migration. He said the shorter cycle can reduce market and counterparty risk, but framed its wider effect as pressure to improve standardisation, automation and innovation in post-trade processes. Practices that can be managed within a two-day cycle may be harder to sustain when settlement is due the next day.
The Eurosystem operates TARGET2-Securities (T2S), which settles securities transactions in central bank money by exchanging cash and securities simultaneously. Cipollone said the platform already handles substantial volumes on both T+1 and T+0 schedules. The Eurosystem is adapting some processes, including its night-time settlement process; those changes are planned for June 2027, ahead of the market-wide move in October.
The speech also described work on tokenised finance. Cipollone said that since March 30, the Eurosystem has accepted certain marketable assets issued in central securities depositories using distributed ledger technology as eligible collateral for credit operations. Since Sept. 21, he said, Pontes has enabled wholesale transactions in tokenised assets to settle in central bank money by connecting market DLT platforms with TARGET Services. The Eurosystem is also assessing whether, and under what criteria, DLT-based assets outside currently eligible settlement systems could qualify as collateral.
What T+1 Changes for European Markets
The move affects the operational timetable for investors, financial institutions and the infrastructure that processes trades. With less time between a trade and settlement, firms will need to coordinate post-trade steps more quickly. Cipollone said the transition is intended to encourage standardised and automated processes, alongside the direct potential to reduce settlement-related risk.
For Europe, the change is also linked to efforts to make capital markets more integrated and competitive. Cipollone argued that efficient post-trade infrastructure can help capital move across borders and make European markets easier for investors to access. Those are stated aims, not evidence that the transition by itself will resolve fragmentation or produce a particular increase in investment.
The parallel work on tokenisation points to a longer-term infrastructure question: whether issuance, trading, clearing, settlement, custody and asset servicing could be brought together in shared digital environments. The speech presents this as an opportunity under exploration, while stressing that the Eurosystem’s collateral standards must continue to meet its requirement that collateral be adequate.
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T2S and Europe’s Settlement Timeline
The T+1 plan is one part of a broader Eurosystem modernisation programme described by Cipollone, which also includes wholesale payments, cross-border payments, DLT and preparations for a digital euro. The speech presents these as connected strands of work to adapt Europe’s financial and payment system, rather than as a single project or a claim that all parts are at the same stage.
Cipollone credited the EU T+1 Industry Committee with coordinating preparations across a complex financial landscape. He said the ECB, European Securities and Markets Authority and European Commission support the market’s preparations. His address was delivered at the committee’s “One year to T+1” event in Frankfurt. The schedule he set out is a June 2027 T2S process update followed by the planned market migration on Oct. 11, 2027.
“Inefficiencies that could be accommodated in a T+2 environment will become much more difficult to sustain under T+1.”
— Piero Cipollone, ECB Executive Board member
Remaining T+1 and DLT Questions
The migration date and planned T2S changes were described in the speech as future milestones; the address does not confirm that implementation or testing is complete. It does not provide a detailed account of the remaining technical work, readiness across individual firms or how operational problems would be handled if they arise. Cipollone said preparations must continue through cooperation between market participants and authorities.
The scope of future DLT collateral eligibility is also unsettled. The Eurosystem is assessing whether and under what criteria assets outside currently eligible settlement systems could qualify. The speech does not announce a final policy, timetable or list of eligible assets. Nor does it quantify the eventual effects of T+1 or tokenisation on costs, risk or market activity.
Testing Before October 2027
The next named infrastructure milestone is the planned June 2027 update to T2S night-time settlement processes. Market participants and authorities will then continue implementation and testing ahead of the scheduled move to T+1 on Oct. 11, 2027. Cipollone said the Eurosystem would keep working with market participants and other European authorities to support the transition.
Separately, the Eurosystem’s review of possible collateral treatment for additional DLT-based assets remains underway, according to the speech. Further details on eligibility criteria and any later decisions have not been provided in the source material. The timing and scope of those decisions remain distinct from the T+1 migration timetable.
Key Questions
What does T+1 settlement mean?
T+1 means a securities trade is scheduled to settle one day after the trade, rather than two days later under T+2. Settlement is when the buyer receives the securities and the seller receives payment.
When is Europe scheduled to move to T+1?
The date stated by ECB Executive Board member Piero Cipollone is Oct. 11, 2027. It is a planned migration, not a completed change.
What changes are planned for T2S before the migration?
Cipollone said the Eurosystem plans changes to T2S processes, including the night-time settlement process, for June 2027. T2S already supports transactions settling on T+1 and T+0, according to his speech.
How is tokenisation connected to the announcement?
Tokenisation is part of the Eurosystem’s wider infrastructure work, not the same as the T+1 migration. Cipollone said Pontes has enabled wholesale transactions in tokenised assets to settle in central bank money since Sept. 21, while potential eligibility for additional DLT-based collateral is still under assessment.
Source: bis.org
