Malta’s preparations for a shorter securities settlement cycle are gathering pace. Through the T+1 National Coordination Group, the Malta Financial Services Authority is bringing together organisations from across the financial market to identify practical challenges and support an orderly transition ahead of the European implementation date of 11 October 2027.
Europe is moving from a T+2 to a T+1 settlement cycle. This means that most securities transactions will need to be completed one business day after the trade, rather than two. Settlement is the point at which the buyer receives the securities and the seller receives payment.
Although the change is often described as a shorter timetable, it will affect many stages of a transaction. Firms may need to confirm trades, arrange payments, provide settlement instructions and resolve problems earlier than they do today.
T+1 is therefore not only a regulatory, structural and operational change. It is also a behavioural change. Market participants will need to move away from working practices that rely on the additional day available under T+2. Earlier communication, quicker escalation, clear responsibilities and closer cooperation with service providers will become increasingly important.
National Coordination Enters Its Next Phase
In April 2026, the MFSA and the Central Bank of Malta established the T+1 National Coordination Group to coordinate Malta’s preparations. The MFSA chairs the Group, while the Central Bank of Malta acts as Vice-Chair. The Malta Stock Exchange also participates as Malta’s central securities depository and as a permanent technical member.
The Group brings together organisations from across the securities market. These include banks, investment services firms, custodians, asset managers, fund service providers, issuers, registrars, market infrastructures, and technology and other service providers.
Following its first meeting in June, the Group held its second meeting at the MFSA on 24 July 2026. Participants discussed European implementation developments, recent industry guidance, the results of the MFSA’s T+1 self-assessment exercise and areas requiring further national coordination.
The meeting showed that market engagement is becoming more practical. Participants moved beyond general questions about T+1 and focused on how the shorter timetable will work in Malta. Discussions covered the availability of cash and securities, the handling of corporate actions, and coordination between issuers, brokers, banks, custodians and the Malta Stock Exchange.
This move from general awareness to practical preparation is essential. The focus is now shifting towards testing, automation, accurate settlement instructions and effective coordination across the full transaction chain. The challenge is no longer simply understanding that T+1 is coming. Each organisation must now determine how its own processes will work within the shorter timetable.
Firms are Preparing at Different Speeds
The second European market-wide readiness survey, conducted by the EU T+1 Industry Committee and The ValueExchange, found that 83% of respondents were actively preparing for T+1. However, only 58% had a formal implementation plan.
Almost two-thirds of respondents identified their reliance on counterparties, intermediaries and technology providers as the main challenge. This is particularly relevant for Malta, where many firms rely on external brokers, custodians, settlement agents, registrars, paying agents, central securities depositories and technology providers.
A firm may therefore consider its internal preparations to be well advanced while still depending on another organisation’s systems, deadlines, testing plans or capacity.
The MFSA developed a self-assessment toolkit to help market participants identify these dependencies and evaluate their level of preparation. It covers operating timetables, the quality of settlement information, automation, governance and reliance on external providers.
Initial submissions show that market participants are generally aware of the transition. However, further work is needed in several areas. These include:
- testing internal processes and systems;
- documenting third-party deadlines;
- confirming that key service providers will be ready;
- clearly assigning responsibilities;
- increasing automation; and
- preparing fallback arrangements in case normal processes do not work as expected.
These findings do not mean that the Maltese market faces obstacles that cannot be overcome. They do, however, show why firms should begin turning plans and assumptions into documented arrangements, tested processes and clearly assigned responsibilities.
Corporate Actions Require Joint Preparation
Corporate actions, such as dividend payments, interest payments and redemptions, are another important area of preparation.
A shorter settlement cycle may affect the dates and processes used to determine which investors are entitled to receive a payment or take part in a corporate event. It may also affect how organisations communicate information to investors and manage transactions that remain incomplete when an event takes place.
European guidance provides a common framework for adjusting corporate-action dates and processes for T+1. It also highlights the need for issuers, market infrastructures, intermediaries and investors to follow consistent practices.
During the second meeting of the National Coordination Group, issuers, market infrastructure representatives and other participants discussed how Malta currently handles dividend and interest payments, redemptions, the setting of key dates and company announcements.
Bringing the different organisations involved in these processes into the same discussion helped clarify several questions. It also showed the value of cooperation across the full transaction chain.
Moving from Planning to Testing
The next stage of Malta’s preparations will place greater emphasis on practical examples, testing and evidence that organisations are ready for the change.
Firms should identify which processes they can test internally and which require cooperation with a broker, custodian or other service provider. They should also identify any tests that depend on the availability of market infrastructure testing systems.
Understanding third-party plans will be particularly important. Firms should know when their main service providers intend to make the necessary changes and when they will be available for testing.
The National Coordination Group’s forthcoming work will include further engagement with stockbrokers and continued discussion of the trading and post-trading process. Future coordination may also cover cash and liquidity arrangements, the movement of collateral, custody services and existing market practices that may be difficult to complete within the T+1 timetable.
The MFSA will continue to monitor progress and engage with the industry through the National Coordination Group. Each firm will need to assess how the change affects its activities, prepare a credible implementation plan and work with its service providers to ensure that transactions can be completed on time.
The transition will ultimately require more than updated rules and systems. It will require market participants to work differently, communicate earlier and respond more quickly. Through continued cooperation, testing and practical engagement, Malta can support an orderly and well-coordinated transition to T+1.
Suggested Pull Quotes
“T+1 is not only a regulatory, structural and operational change. It is also a behavioural change requiring earlier action, clearer responsibilities and stronger coordination.”
“The focus is now moving from understanding T+1 to testing how it will work in practice.”
“A firm’s preparation depends not only on its internal arrangements, but also on the readiness of its key service providers.”
