Recital (3)

In its report of 18 November 2024 on the assessment of the appropriateness of shortening the settlement cycle in the European Union, the European Supervisory Authority (European Securities and Markets Authority) (ESMA), established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council, concluded that shortening the settlement cycle in the Union to T+1 would significantly reduce risks in the market, in particular with respect to counterparty and volatility risks, and free up capital no longer required to cover margin calls. The T+1 settlement cycle would also enable Union capital markets to keep up with the evolution of other global markets, eliminating the costs associated with the current misalignment of settlement periods. It would also contribute to the further harmonisation of corporate event standards and market practices in the Union, and more generally to the competitiveness of Union capital markets. The Commission shares those conclusions.