The European Securities and Markets Authority has appointed Giovanni Sabatini to act as independent industry chair, leading the organisation’s work to facilitate the T+1 migration in the EU.
Giovanni Sabatini
Sabatini has a wealth of experience working in securities markets, both in the private and public sector. He has served as a member of the European Economic and Social Committee and held roles within the International Organization of Securities Commissions – IOSCO, the European Banking Federation and the European Central Securities Depositories Association (ECSDA).
In his role, Sabatini will coordinate the work of the industry, acting as the link between market participants.
ESMA announced last month that it would prepare for a move to T+1 in the EU by Q4 2027 – in line with the UK. Published in the watchdog’s final T+1 recommendations, ESMA recommends that the migration to T+1 occurs simultaneously across all relevant instruments – with a coordinated approach across the continent “desirable”.
The watchdog recommends 11 October as the optimal date for the switch – considering the difficulties of going live of such a substantial project in November and December. The regulator also wishes to avoid the first Monday of October as the transition date, as it is the first Monday after quarter-end.
The UK taskforce has, too, selected 11 October as the recommended date for the switch – due to be confirmed when the final report is published in January 2025.
In a report, ESMA highlighted the increased efficiency and resilience of post-trade processes that a move to T+1 would facilitate, “achieving the objective of further promoting settlement efficiency in the EU, contributing to market integration and to the Savings and Investment Union objectives”.
Shortening the settlement cycle in the EU “will undoubtedly change the way in which markets function today”, the report stated, affecting entities throughout the transaction and settlement chains with varying levels of impact.
A separate report, published by the T+1 technical group of the UK accelerated settlement taskforce, outlines 43 ‘principal recommendations’, covers critical post-trade activities that firms must be able to complete efficiently in a T+1 environment. They cover the areas of success criteria, settlement, FMIs, static data, corporate actions, securities financing and FX.
There is also 14 ‘additional recommendations’, which assess environmental issues that need to be addressed if the UK is to maximise the efficiency gains that T+1 could deliver – but are not essential to successful implementation.