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Europe is preparing to shorten securities settlement from two days to one, with the move to T+1 scheduled for Oct. 11, 2027. ECB Executive Board member Piero Cipollone says the shift is also driving changes to post-trade processes, including planned updates to the Eurosystem’s T2S platform in June 2027. The ECB is developing related work on tokenised assets, but some policy and implementation details remain under review.
Europe is scheduled to move to next-day securities settlement on Oct. 11, 2027, reducing the period between a trade and the exchange of securities and cash from two days to one. In a keynote on Oct. 29, European Central Bank Executive Board member Piero Cipollone said preparations are part of a broader effort to modernise financial infrastructure, with changes to the Eurosystem’s settlement platform planned before the migration.
Cipollone spoke at an EU T+1 Industry Committee event in Frankfurt under the title “One year to T+1.” The planned change is commonly described as moving from T+2 to T+1: settlement is intended to take place one business day after a securities trade rather than two. The ECB says the shorter timetable can reduce market and counterparty risk, while requiring firms to review processes that have relied on the longer cycle.
The Eurosystem operates TARGET2-Securities (T2S), which settles securities transactions in central bank money by exchanging cash and securities simultaneously. Cipollone said T2S already handles substantial volumes on T+1 and T+0 timelines, so the platform is not starting from scratch. The Eurosystem plans changes to its night-time settlement process in June 2027, ahead of the market’s scheduled October migration.
The speech also described ongoing 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 its credit operations. He also said that Pontes has enabled settlement of wholesale transactions in tokenised assets in central bank money since Sept. 21, connecting market DLT platforms with TARGET Services. The ECB is assessing whether and under what criteria other DLT-based assets could qualify as collateral.
A Tighter Settlement Deadline for Europe
Moving to T+1 compresses the time available for investment firms, banks, custodians and market infrastructure providers to confirm trades, arrange funding and deliver securities. Cipollone said processes that can function within a two-day cycle may prove harder to sustain when settlement is due the next day. That makes operational readiness a central part of the change, not merely a calendar adjustment.
The ECB’s stated case is that shorter settlement may reduce exposure to market movements and counterparty failure. It also argues that more efficient post-trade arrangements can help capital move across borders and make European markets easier to access. Those are policy aims, not demonstrated outcomes of the transition: the speech does not quantify expected risk reductions, costs or effects on market activity.
The change also has a fixed implementation timetable, which makes coordination across market participants and public authorities consequential. Firms will need to align their own systems and procedures with the revised schedule and the planned T2S changes. Any disruption could affect the completion of trades across connected European markets, although Cipollone’s speech did not identify a specific operational problem.
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T+1 and the Eurosystem’s Digital Work
The T+1 project sits within a wider Eurosystem programme described by Cipollone, covering cash, payments, securities settlement and new technology. He cited work on banknotes, preparation for a digital euro, wholesale payments, cross-border payments and distributed ledger technology. His argument was that these initiatives are related parts of an effort to adapt European financial infrastructure, rather than isolated projects.
For the settlement change, the ECB is working with the European Securities and Markets Authority, the European Commission and the EU T+1 Industry Committee. Cipollone credited cooperation between authorities and industry for progress so far, while warning that implementation and testing still need to advance. He described Europe’s financial landscape as complex and fragmented, a feature that makes common timetables and coordinated operational changes particularly relevant.
Tokenisation is a separate but connected strand of the work. The ECB’s stated direction is to explore how distributed-ledger systems can support the issuance and transfer of financial assets and how central bank money can be used in settlement. The measures described in the speech show activity under way, but do not amount to a decision to move all securities markets onto shared digital platforms.
“The transition to T+1 is part of a broader transformation of Europe’s financial infrastructure.”
— Piero Cipollone, ECB Executive Board member, in a keynote on Oct. 29, 2026
Open Questions Before Migration
The Oct. 29 keynote confirms the planned migration date and the timetable for the described T2S changes, but it does not provide a detailed operational schedule for every market participant or a full account of testing milestones. It is also not clear from the speech whether the October date could change if preparations encounter difficulties.
The ECB has not yet determined whether, how or under what criteria DLT-based assets outside currently eligible settlement systems could qualify as collateral. Cipollone said that assessment is under way and that the collateral framework must keep assets adequate. The speech also gives no quantified estimates of the financial or operational costs of T+1, nor does it report measured impacts on settlement risk or market competitiveness.
Testing Ahead of October 2027
According to Cipollone, the immediate work is to continue implementation and testing, with public authorities and market participants coordinating ahead of the change. The Eurosystem’s planned T2S night-time process updates in June 2027 are the next specified infrastructure milestone in the speech; the move to T+1 is scheduled for Oct. 11, 2027.
Market participants will need to prepare their procedures and systems for the shorter settlement window. Separately, the ECB’s assessment of whether additional DLT-based assets may qualify as collateral remains in progress. The keynote did not give a completion date or a final policy decision on that work.
Key Questions
What does T+1 settlement mean?
T+1 means settlement one business day after a securities trade, rather than two business days 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 given by ECB Executive Board member Piero Cipollone is Oct. 11, 2027. The speech presents this as the planned migration date.
What changes are planned for T2S?
The Eurosystem plans changes to the T2S night-time settlement process in June 2027. Cipollone said the platform already handles substantial volumes on T+1 and T+0 timelines.
How does tokenisation fit into the ECB’s plans?
The ECB is working on ways to connect market platforms using distributed ledger technology with settlement in central bank money. Cipollone said Pontes has enabled wholesale transactions in tokenised assets to settle through TARGET Services since Sept. 21, and that the ECB is assessing possible collateral eligibility for additional DLT-based assets.
Has the ECB decided which DLT-based assets can be used as collateral?
No. Cipollone said the ECB is assessing whether and under what criteria DLT-based assets outside currently eligible settlement systems could qualify. The speech did not announce a final decision.
Source: bis.org
