Cyprus Securities and Exchange Commission Issues Circular 780 to Guide Market Transition to T+1 Settlement

CySEC Issues Circular 780 for T+1 Settlement Transition

The Cyprus Securities and Exchange Commission (CySEC) has formally issued Circular 780, setting out new regulatory requirements and supervisory expectations to support the market-wide transition to a T+1 securities settlement cycle. Published on 3 June 2026, the circular highlights the critical necessity for regulated entities to prepare well in advance for shortened settlement timelines, aligning domestic market practices with evolving international standards.

Under the updated framework, which falls within the scope of Article 5 of the EU Central Securities Depositories Regulation (CSDR) as amended by Regulation (EU) 2025/2075, transactions in transferable securities executed on trading venues are expected to settle one business day after execution. This shift aims to strengthen overall market resilience, reduce counterparty and operational risks, and modernize the post-trading landscape.

Key Operational Pressures and Requirements

The transition impacts stakeholders across the entire securities trading and settlement chain, including central securities depositories, central counterparties, custodians, brokers, asset managers, and investors. CySEC has emphasized several key areas that firms must address:

• Shortened processing timelines: Institutional investors and intermediaries will have significantly less time to allocate, confirm, match, and settle transactions.
• Increased reliance on automation: Manual workflows will become practically obsolete, as operational inefficiencies heighten settlement risks under a compressed timeline.
• Liquidity and funding pressures: Funding, collateral, and margin requirements must be managed earlier, requiring market participants to ensure the timely availability of cash and securities.
• Cross-border operational challenges: Differences in time zones, foreign exchange execution timelines, and pre-funding requirements will introduce added complexity to cross-border transactions.

Readiness Surveys and Deadlines

To support implementation planning and provide supervisory insight, CySEC has invited all impacted regulated entities to participate in two specialized, parallel surveys that remain open until 9 June:

• National Competent Authorities’ (NCA) Survey: A short, voluntary survey whose responses will be accessible exclusively to CySEC and ESMA, focusing on core readiness metrics.
• EU T+1 Industry Committee (EUIC) Readiness Survey: A broader assessment collecting data on current settlement cycle performance, fail rates, system readiness, vendor dependencies, testing plans, and key constraints.

Dr George Theochardies, Chair of CySEC, underlined the magnitude of the regulatory shift, stating: “Transitioning to T+1 is a significant operational change for the market and requires Regulated Entities to review and adapt their systems, controls and operational processes across the entire trading and post-trading chain.”

CySEC urges all in-scope entities to complete both readiness surveys by the 9 June deadline. Timely submissions are vital for monitoring industry preparedness, identifying potential bottlenecks, and ensuring a smooth, resilient adoption of the T+1 settlement cycle across the Cyprus financial ecosystem.

This article covers an official CySEC announcement. For more information, corrections or tips, contact report@cyprus-insider.com.