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EU RegCORE Client Alert | Capital Markets Union + Savings and Investment Union
QuickTake
On 26 May 2026, the European Securities and Markets Authority (ESMA) published a Consultation Paper (CP) on amendments to ESMA’s guidelines on standardised procedures and messaging protocols (the Guidelines) as applicable between investment firms and their professional clients under Article 6(2) of the Central Securities Depositories Regulation (CSDR). The consultation is open until 7 July 2026.Show Footnote ESMA intends to finalise the revised Guidelines by October 2026, with an application date of 7 December 2026 aligned to the entry into force of the amended RTS on Settlement Discipline. The EU transition to a T+1 settlement cycle takes effect on 11 October 2027.
The proposals represent a material shift in the regulatory expectations governing post-trade communication between investment firms and their professional clients. For regulated firms, the immediate priority is threefold: (1) reviewing and, where necessary, repapering contractual documentation; (2) updating internal policies and procedures; and (3) contributing to the consultation process before the 7 July 2026 deadline.
Key elements include:
- What. ESMA proposes to amend the Guidelines on allocations and confirmations to align them with the amended RTS on Settlement Discipline, requiring electronic standardised machine-readable communication of allocations and confirmations using international open communication procedures and standards. The proposals remove oral communication from regular workflows, restrict email and GUI use to machine-readable formats, eliminate the optionality of domestic/internal messaging standards, and clarify that contractual arrangements may be documented in any legally binding form.
- When. The revised Guidelines are proposed to apply from 7 December 2026. Firms should begin preparation immediately given the consultation deadline of 7 July 2026 and the proximity of the application date. T+1 takes effect on 11 October 2027 and firms must have compliant infrastructure operational in advance.
- Who. The proposals apply to investment firms (including credit institutions providing investment services) and their professional clients (as defined by Section I of Annex II MiFID II) in respect of transactions in Article 5(1) CSDR instruments: transferable securities, money-market instruments, units in collective undertakings and emission allowances. Professional client status is relevant irrespective of whether the client is categorised as an eligible counterparty or non-professional for other services.
- What to consider doing now: Firms should treat the CP as a 2026 readiness trigger: map current allocation and confirmation channels, identify non-compliant communication flows, engage vendors and clients, and decide whether to submit evidence-based feedback before the consultation closes.
This Client Alert analyses ESMA’s CP, the changes introduced by the amended Guidelines and the resulting practical considerations for firms and their legal as well as policy documentation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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