AMF and Banque de France call for coordinated move to T+1 settlement

French financial regulator The Autorité des Marchés Financiers (AMF) and the Banque de France have issued a call for a well-coordinated and efficient transition to a T+1 settlement cycle for transactions on securities across the EU. This initiative comes at a time when the European Commission has confirmed that the principle of T+1 has been accepted. This shift brings substantial challenges, in particular due to EU market specificities that must be managed smoothly and requires a careful calibration of the timeline.

The AMF and the Banque de France notably stress the significance of cooperating closely in particular with the UK and Switzerland, given the interdependencies between EU and these markets.

Both the USA and Canada moved to T+1 settlement earlier this year.

The AMF and the Banque de France are also of the view that a two-phased approach is the most pragmatic way forward. As a first step, in a T+2 settlement cycle environment, all trades on securities should be confirmed and allocated by the end of the trade date, which implies essential operational and technical upgrades in the industry, such as standardizing data exchanges and automating manual processes. As a second step, the settlement cycle could then be reduced to T+1, with a satisfactory level of trade confirmations on the trade date.

Moreover, the forthcoming T+1 framework should encompass regulatory aspects but also be accompanied by incentives, both regulatory and economic, to facilitate it.

This comprehensive strategy aims to ensure a smooth and effective transition to the T+1 settlement cycle, safeguarding the stability, efficiency and competitiveness of European financial markets.

About the AMF

The AMF is an independent public authority responsible for ensuring that savings invested in financial products are protected and that investors are provided with adequate information. The AMF also supervises the orderly operations of markets.

About Banque de France

The Banque de France, a member of the Eurosystem, is an independent institution with three core tasks: monetary strategy, financial stability, and the provision of services to the economy. It contributes to the definition of euro area monetary policy and ensures its implementation in France. The Banque de France supervises banks and insurance companies, and works to mitigate risks. It also offers a range of economic services to businesses and private individuals.