ESMA launches shortened settlement call for evidence
06 October 2023 France
Image: Andrii Yalanskyi/stock.adobe.com
The European Securities and Markets Authority (ESMA) has launched a call for evidence on the potential costs and benefits of a reduced settlement cycle in the EU.
Alongside considerations of a shortened settlement cycle in the EU, the call for evidence will look into whether regulatory action will be needed to reduce the impact of other jurisdictions’ move to T+1.
ESMA has requested input from all stakeholders involved in financial markets, particularly market infrastructures, their members and participants, investment firms, issuers, fund managers, retail and wholesale investors and their representatives. Feedback will be welcomed until 15 December.
A report detailing the report’s main findings will be published and submitted to the European Commission in 2024. An earlier report may also be provided regarding possible regulatory actions that could be taken to address the impact of the US’ move to T+1 on EU market participants.
Pete Tomlison, director of post trade at the Association for Financial Markets in Europe (AMFE), comments: “This is an important step in moving forward the debate on T+1 settlement. Moving to T+1 should not only be a question of ‘when’, but also ‘why’ and ‘how’. It is important to ensure that any decision to shorten the settlement cycle is underpinned by a robust qualitative and quantitative analysis of the potential benefits, risks and costs, and also takes account of the unique complexities of EU capital markets.
“Any potential move to T+1 will require collaboration from a broad range of industry stakeholders, with the ultimate objective of making EU securities markets safer and more efficient. We welcome the opportunity to contribute to this initiative.”
ESMA has also published a second consultation paper under the Markets in Crypto-Assets Regulation (MiCA), seeking feedback from stakeholders on five proposed rule sets. These include sustainability indicators for distributed ledgers, disclosures of inside information and technical requirements for white papers. Trade transparency and crypto-asset service provider record-keeping and business continuity requirements are also included in the consultation.
Feedback is welcomed until 14 December. Along with a third consultation package, ESMA expects to send a final report and draft technical standards to the European Commission by 30 June 2024.
Alongside considerations of a shortened settlement cycle in the EU, the call for evidence will look into whether regulatory action will be needed to reduce the impact of other jurisdictions’ move to T+1.
ESMA has requested input from all stakeholders involved in financial markets, particularly market infrastructures, their members and participants, investment firms, issuers, fund managers, retail and wholesale investors and their representatives. Feedback will be welcomed until 15 December.
A report detailing the report’s main findings will be published and submitted to the European Commission in 2024. An earlier report may also be provided regarding possible regulatory actions that could be taken to address the impact of the US’ move to T+1 on EU market participants.
Pete Tomlison, director of post trade at the Association for Financial Markets in Europe (AMFE), comments: “This is an important step in moving forward the debate on T+1 settlement. Moving to T+1 should not only be a question of ‘when’, but also ‘why’ and ‘how’. It is important to ensure that any decision to shorten the settlement cycle is underpinned by a robust qualitative and quantitative analysis of the potential benefits, risks and costs, and also takes account of the unique complexities of EU capital markets.
“Any potential move to T+1 will require collaboration from a broad range of industry stakeholders, with the ultimate objective of making EU securities markets safer and more efficient. We welcome the opportunity to contribute to this initiative.”
ESMA has also published a second consultation paper under the Markets in Crypto-Assets Regulation (MiCA), seeking feedback from stakeholders on five proposed rule sets. These include sustainability indicators for distributed ledgers, disclosures of inside information and technical requirements for white papers. Trade transparency and crypto-asset service provider record-keeping and business continuity requirements are also included in the consultation.
Feedback is welcomed until 14 December. Along with a third consultation package, ESMA expects to send a final report and draft technical standards to the European Commission by 30 June 2024.
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