Introduction
The Cyprus Securities and Exchange Commission issued Circular C797 on 26 August 2026 to inform regulated entities about key deadlines and action points for transitioning to a T+1 settlement cycle as outlined by ESMA. This is a clarification of existing obligations under Regulation (EU) No 909/2014 with major deadlines in December 2026 and October 2027.
CySEC Circular C797 – At a Glance
- Issued date: 26 August 2026
- Applies to: Cyprus Investment Firms, UCITS Management Companies, AIF Managers, Depositaries, Trading Venues, Central Securities Depositories
- Deadline: 7 December 2026 for allocations and confirmations
- Key requirement: Transition to T+1 settlement cycle by October 2027
What Does This Circular Require?
What firms must do. Comply with new allocation and confirmation processes by December 2026; optimize settlement processes by October 2027.
Legal basis. Regulation (EU) No 909/2014
Regulatory objective. To ensure smooth transition to a T+1 settlement cycle and mitigate operational risks.
Who Is in Scope?
Circular C797 applies to entities involved in securities settlement as per EU regulations.
- Cyprus Investment Firms
- UCITS Management Companies
- AIF Managers
- Depositaries
- Trading Venues
- Central Securities Depositories
Edge cases and exceptions:
- Entities acting as both UCITS and AIFs Depositaries: Specific article references apply
Key Requirements Breakdown
Technical / System Requirements
Entities should ensure the use of internationally recognised electronic communication standards and functionalities supporting efficient settlement processing.
Validation or Approval Process
Key focus on quality, completeness, and timeliness of settlement-related data.
Practical Implementation: What Firms Should Do
In practice, entities must accelerate operational, technological, and organizational preparations. CySEC expects firms to allocate sufficient resources to meet the transition deadlines and requirements. Common mistakes include neglecting dependencies on third parties and failing to conduct end-to-end testing.
Key Dates and Deadlines
Date | What happens |
7 December 2026 | Compliance with new allocation and confirmation process requirements |
11 October 2027 | Full compliance with T+1 settlement cycle requirements |
How to Apply This Correctly
- Assess current readiness and that of relevant parties.
- Implement necessary operational changes by December 2026.
- Conduct early end-to-end testing to identify and address deficiencies.
Compliance Officer Checklist
- Review trading and settlement chain.
- Ensure use of correct settlement-related data.
- Commence operational, technological, and organizational preparations.
Evidence to Retain
- Compliance with new allocation processes.
- Use of electronic communication standards.
- Testing results showing readiness for T+1 cycle.
Why This Matters
This change seeks to enhance the efficiency and resiliency of financial markets. Non-compliance risks include operational disruptions, increased costs, and reputational damage, as well as possible settlement discipline measures.
Frequently Asked Questions
What is the first key deadline for the T+1 transition?
The first key deadline is 7 December 2026 for complying with new requirements for allocations and confirmations.
Who issued the T+1 transition guidelines?
The guidelines were issued by the European Securities and Markets Authority (ESMA).
What entities are affected by the T+1 transition?
Affected entities include Cyprus Investment Firms, UCITS Management Companies, AIF Managers, Depositaries, Trading Venues, and Central Securities Depositories.
What are some potential risks of non-compliance?
Non-compliance may lead to increased settlement fails, higher implementation costs, disrupted interactions with infrastructures, and potential settlement discipline measures.
What should firms focus on during the implementation?
Firms should focus on reviewing the trading and settlement chain, using correct settlement-related data, and conducting end-to-end testing.
How CX Financia Can Support You
CX Financia assists firms with Regulatory Compliance, Risk Management, and Licensing. Our services help ensure timely preparation and successful transition to the T+1 settlement cycle. Contact us to discuss how we can support your compliance efforts.
Read the CySEC Circular C797
Read more at Regulatory Updates
Disclaimer
General information, not regulatory advice.