AMF and Banque de France Propose T+1 Settlement Cycle Transition

The Autorité des Marchés Financiers (AMF) and the Banque de France have underscored the importance of close cooperation with the UK and Switzerland, citing the interdependencies between the EU and these markets. They advocate for a phased approach to transitioning to a T+1 settlement cycle.

The proposed strategy includes an initial phase where all securities trades should be confirmed and allocated by the end of the trade date, requiring significant operational and technical upgrades, such as standardizing data exchanges and automating processes. The second phase would involve reducing the settlement cycle to T+1, contingent upon satisfactory trade confirmations on the trade date.

The AMF and Banque de France also suggest that the forthcoming T+1 framework should incorporate both regulatory and economic incentives to facilitate the transition. This approach aims to enhance the stability, efficiency, and competitiveness of European financial markets.