T+1 means that the settlement of a securities trade—the official transfer of securities to the buyer and cash to the seller—must occur one business day after the trade is executed (T). This is a reduction from the current T+2 cycle.

The primary reasons are to reduce counterparty and market risk, increase market efficiency, and align European markets with other major economies. It is also part of a broader strategic ambition to make EU capital markets more modern, competitive, and attractive to global investors.

The EU, EEA (including Norway, Iceland and Liechtenstein), UK, and Switzerland are all targeting October 11, 2027 for the mandatory transition to a T+1 settlement cycle.

This coordinated approach is designed to minimize cross-border friction and market disruption.

According to the EU T+1 High-Level Roadmap, the mandate primarily applies to transactions in transferable securities (like cash equities and ETFs) that are executed on an EU trading venue and settle in an EU-registered Central Securities Depository (CSD).

OTC trades
For transactions executed over-the-counter (OTC), moving to T+1 is considered a "Market Convention," not a legal mandate. However, the industry is strongly encouraged to adopt T+1 for these trades to maintain harmonization.

SFTs
An agreement was reached to exempt Securities Financing Transactions (SFTs) executed on trading venues from the mandatory T+1 settlement obligation. However, currently, many SFTs are already settled on T+1 or T+0. 

No, the recommendations themselves do not have a binding effect in law. However, they are based on an "Adhere or Explain" principle. This means market participants who choose not to follow a recommendation are expected to inform their stakeholders and explain their reasoning to minimize negative impacts.

The roadmap outlines several key "gating events" with recommended deadlines (all times in CET):

On Trade Date (T):

1. 17:00: Deadline for stock loan recall notification requests
2. 23:00: Deadline for trade allocations and confirmations
3. 23:59: Deadline for submitting settlement instructions (SIs) to CSDs for the first night-time settlement cycles

On Settlement Date (T+1):

1. 00:00: Start of settlement processing in securities settlement systems (SSS)
2. 16:00: Proposed harmonized DvP (delivery-versus-payment) cutoff time. A future extension to 17:00 is also being explored by the Committee to further enhance settlement efficiency, with analysis due by the end of 2025.

While we fully support and will align with the harmonised European timetable, our global nature as an ICSD means we offer an even more advantageous schedule for our international clients.

• For European (T2S) settlement: Our CSD business (Clearstream Europe AG, CEU) will align with the new T2S schedule, expected to begin settlement processing at 00:00 CET, as recommended by the EU Roadmap.
• For International (ICSD) settlement: Our ICSD business (Clearstream Banking S.A., CBL) is designed for a global client base. To serve clients in Asia during their business day and to facilitate settlement in APAC currencies, we begin our settlement day significantly earlier than midnight CET. This "follow-the-sun" model is a core part of our service and will continue under T+1.

In essence, the 00:00 CET deadline is the baseline for European harmonization. As a leading ICSD, we go beyond this by starting earlier to provide a seamless, global settlement service across all time zones.

The compressed timeline requires significant changes. The most visible change is that for distributions (like dividends), "ex-date" and "record date" will now fall on the same day. 

Furthermore, the EU Roadmap strongly recommends the automation of both buyer protection and market claims processing.

For automated buyer protection, while this is a key recommendation, it is widely assumed that a fully automated solution will not be ready for the go-live date in October 2027. However, firms must prepare for its eventual implementation, which will require the ability to send and receive new, industry-developed messages in both ISO 15022 and ISO 20022 formats.

Yes, this has been considered. An agreement was reached that includes a recital empowering the European Commission to consider a temporary suspension of cash penalties if a material risk of a spike in settlement fails is identified during the transition period. 

The EU T+1 Industry Committee has established several task forces to address complex issues and ensure long-term efficiency. There are three key strategic initiatives: 

1. Standardizing settlement and standing settlement instructions (SSIs) 
   Task forces have been established to create a single "gold standard" for settlement instruction formats and to harmonize how SSIs are managed and exchanged across the industry. This directly targets a major source of data-related settlement fails (Recommendations MC-04, ST-01.3). 
2. Developing a partial settlement market practice 
   A dedicated taskforce will work on establishing a market practice that makes partial settlement the default option, rather than the exception. This will help maximize the use of available securities and reduce the overall value of fails (Recommendation ST-03.3). 

3. Optimizing SFT settlement
    The Committee is undertaking significant analysis on how to best manage securities financing transactions (SFTs), especially repo trades expected to move to a T+0 cycle. A key consideration is the potential introduction of an additional intraday net settlement cycle to mitigate severe intraday liquidity risks (Recommendation SF-01). 

As a leading (international) central securities depository, (I)CSD, Clearstream is a strategic enabler at the heart of the T+1 transition.

Our role extends beyond simply ensuring our infrastructure is ready. We are actively shaping the future market standards. This leadership is demonstrated through our direct involvement in the official EU T+1 Industry Committee, where we co-chair the Settlements workstream, and through our different roles in industry forums such as chair of the Securities Market Practices Group (SMPG) in Germany. 

Clearstream is not just positioned to meet this mandate; we are a pioneer in this area.

Hold & Release and Partial Settlement are core product offerings across our platforms. Clearstream was the first ICSD to implement Partial Release and continues to actively shape market standards.

Our support is comprehensive, covering both our CSD (T2S) and ICSD (CBL) platforms and giving clients granular control via Xact Web Portal and Swift. 

We provide a multi-layered approach combining real-time alerts, predictive analytics, and automated resolution tools, including: 

1. Real-time alerts
   Our Allegement Notifications provide immediate alerts for unmatched trades, enabling early investigation. 

2. Predictive analytics
   Our Settlement Dashboard and Prediction Tool uses AI to help clients forecast potential settlement fails up to four days in advance, allowing them to take preemptive action. 

3. Automated fails management 
   We offer Automated Securities Lending (ASL) to provide coverage for delivery shortfalls and minimize penalties, a vital service for maintaining settlement discipline under T+1. 

Our approach is proactive and client-centric, we are supporting clients through: 

1. Comprehensive T+1-ready services including STP instruction processing, automated fails management (Settlement Prediction Tool and Smart Realignment), advanced liquidity tools like T2S Auto-Collateralization, and our AI-powered engine, OSCAR, (Own Selection Criteria with Automated Reasoning), which enables intelligent, automated collateral basket creation and negotiation using natural language and machine learning. 

2. A dedicated Client Engagement Program which includes workshops, technical documentation, and our "Journey to T+1" LinkedIn newsletter series to keep clients informed. For direct questions, we have also established a dedicated email: t+1@clearstream.com.