Implementation of T+1 Settlement of Securities Transactions

CENTRAL BANK OF ICELAND

11 November 2026
Ref.: 2503207

Circular no.: 32/2026
To pension funds

Subject: Implementation of T+1 settlement of securities transactions

The Central Bank of Iceland draws the attention of pension funds to the planned shortening of the settlement cycle for securities transactions from T+2 to T+1 in Europe.

T+1 means that securities transactions carried out on the trading day, T, shall generally be settled on the next trading day, T+1. The current general settlement cycle in Europe is T+2. With the change, the time that market participants have for confirmation and matching of transactions, foreign exchange transactions, delivery of securities and resolution of discrepancies before settlement will therefore be significantly shortened.

Regulation (EU) 2025/2075 amends Regulation (EU) No. 909/2014 on securities settlement and central securities depositories (CSDR) and provides for the shortening of the settlement cycle for certain securities transactions to T+1. The change enters into force in the European Union on 11 October 2027. According to the parliamentary agenda of the current session, the Minister of Finance and Economic Affairs is expected to present a bill in January 2027 to implement the act, but it is envisaged that the Icelandic market will follow the same timeline as in Europe.

The change may affect the operations of pension funds, both due to transactions with domestic and foreign securities. A shorter settlement cycle may, among other things, affect foreign exchange transactions, custody, settlement and communication with asset management parties, custodians and other service providers. At the same time, there will be less scope to correct discrepancies before settlement occurs. Settlement failures can lead to daily fines under CSDR rules and, as the case may be, have cost effects on customers in the settlement chain.

The Central Bank encourages pension funds to begin preparations now and, among other things:

• analyse what impact T+1 may have on their own processes and securities transactions,

• review work procedures and communication with custodians, asset management parties and other relevant service providers,

• specifically examine the impact on foreign exchange transactions and settlement of foreign securities transactions,

• monitor further information on implementation, testing and local deadlines as they become available.

Kalkofnsvegur 1 101 Reykjavík www.sedlabanki.is 569 9600 sedlabanki@sedlabanki.is

CENTRAL BANK OF ICELAND

The Central Bank of Iceland has published a special information page on CSDR T+1 where

further information on the change, entry into force, impact on the Icelandic market and preparation of market participants can be found. Inquiries regarding T+1 may be directed to the Central Bank of Iceland at the email address

csdr@sedlabanki.is. Yours faithfully,

CENTRAL BANK OF ICELAND
Aðalsteinn Eymundsson

Kolbeinn Kristinsson department head specialist Conduct Supervision Conduct Supervision