Central securities depository
Template:Short description A central securities depository (CSD) is a specialized financial market infrastructure organization holding securities such as shares or bonds, either in certificated or uncertificated (dematerialized) form, allowing ownership to be easily transferred through a book entry rather than by a transfer of physical certificates. This allows brokers and financial companies to hold their securities at one location where they can be available for clearing and settlement. In recent decades this has usually been done electronically, making it much faster and easier than was traditionally the case where physical certificates had to be exchanged after a trade had been completed.
In some cases these organizations also carry out centralized comparison and transaction processing such as clearing and settlement of securities transfers, securities pledges, and securities freezes.
In modern corporate debt markets, investors achieve collateralization through CSDs. The CSDs operate as trustees for the owners of the security whereby the collateral is stored and automatically transferred to the lenders in case of non-performance.[1]
History
The first recorded CSD was the Wiener Giro- und Cassen-Verein in Vienna, established in 1872.[2]Template:Rp Also in 1872, the Template:Ill introduced a CSD-like service (Template:Langx), discontinued it two years later, and revived it on a permanent basis in 1882.Script error: No such module "Unsubst". Similarly named Script error: No such module "Lang". institutions subsequently spread in Germany, and under the German occupation of France, also to France in the early 1940s. The United States adopted the CSD model with the creation of the Depository Trust Company in 1973 following coordinated initiatives of the financial industry in the late 1960s. In the United Kingdom, the CREST project was only initiated in 1993, leading to the 1996 creation of CRESTCo as the country's first CSD.
The development of the eurobond market in the 1960s led to the first so-called international CSD or ICSD in the form of the Euroclear System initially developed by the Morgan Guaranty branch in Brussels, started in 1968 and reorganized in late 2000 as Euroclear Bank. In reaction, a group of other banks in 1970 founded a competing entity in nearby Luxembourg, initially called Cedel and rebranded in 2000 as Clearstream Banking SA. At least initially, Euroclear was viewed as largely aligned with buy side interests whereas Cedel was closer to the sell side.Template:R
Scope
A CSD can be national or international in nature, and may be for a specific type of security, such as government bonds.
Domestic central securities depository
Many countries have one domestic CSD that was traditionally associated with the national stock exchange. These organizations are typically heavily regulated by the government and may or may not be separate from the exchanges where trading in securities occurs.
International central securities depository (ICSD)
An international CSD is a central securities depository that settles trades in international securities such as eurobonds although many also settle trades in various domestic securities, usually through direct or indirect (through local agents) links to local CSDs. Examples of international CSDs include Clearstream Banking SA (previously Cedel), Euroclear Bank, and SIX SIS. While viewed as a national CSD rather than an ICSD, the US Depository Trust Company (DTC) does hold over $2 trillion in non-US securities and in American depositary receipts from over 100 nations.
Functions
- Safekeeping Securities may be in dematerialized form, book-entry only form (with one or more "global" certificates), or in physical form immobilized within the CSD.
- Deposit and withdrawal Supporting deposits and withdrawals involves the relationship between the transfer agent and/or issuers and the CSD. It also covers the CSD's role within the underwriting process or listing of new issues in a market.
- Dividend, interest, and principal processing, as well as corporate actions including proxy voting Paying and transfer agents, as well as issuers are involved in these processes, depending on the level of services provided by the CSD and its relationship with these entities.
- Other services CSDs offer additional services aside from those considered core services. These services include securities lending and borrowing, matching, and repo settlement, or ISIN assistance.
- Pledge - Central depositories provide pledging of share and securities. Every country is required to provide legal framework to protect the interest of the pledger and pledgee.
However, there are risks and responsibilities regarding these services that must be taken into consideration in analyzing and evaluating each market on a case-by-case basis.[3]
Regional and global bodies
CSDs have formed five regional associative bodies with partly overlapping membership: for example, the Central Securities Depository of Turkey (Template:Langx, MKK) is an associate member of ECSDA and a full member of ACG, AECSD and AMEDA. The five associations, in turn, have formed a global body, the World Forum of Central Securities Depositories.
European Central Securities Depositories Association
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The European Central Securities Depositories Association (ECSDA), based in Brussels, was established in November 1997 by 13 founding members.[4] As of early 2025, ECSDA had 32 full members and 8 associate members.[5]
- Template:Flagicon OeKB CSD
- Template:Flagicon Euroclear Bank
- Template:Flagicon Euroclear Belgium
- Template:Flagicon Central Depository AD (CDAD)
- Template:Flagicon SKDD
- Template:Flagicon Cyprus Stock Exchange (CSE)
- Template:Flagicon CSD Prague (CDCP)
- Template:Flagicon Euronext Securities Copenhagen
- Template:Flagicon Euroclear Finland
- Template:Flagicon Euroclear France
- Template:Flagicon Clearstream Banking AG
- Template:Flagicon ATHEXCSD
- Template:Flagicon KELER
- Template:Flagicon Verðbréfamiðstöð Íslands (VBM)
- Template:Flagicon Euronext Securities Milan
- Template:Flagicon Template:Flagicon Template:Flagicon Nasdaq CSD
- Template:Flagicon Clearstream Banking SA
- Template:Flagicon LuxCSD
- Template:Flagicon Malta Stock Exchange (MSE)
- Template:Flagicon Single Central Securities Depository (DCU)
- Template:Flagicon CSD & CC Montenegro
- Template:Flagicon Euroclear Nederland
- Template:Flagicon Euronext Securities Oslo
- Template:Flagicon KDPW
- Template:Flagicon Euronext Securities Porto
- Template:Flagicon Depozitarul Central
- Template:Flagicon CDCP SR
- Template:Flagicon KDD Central Securities Clearing Corporation
- Template:Flagicon Iberclear
- Template:Flagicon Euroclear Sweden
- Template:Flagicon SIX SIS
- Template:Flagicon Euroclear UK & International
Associate members as of early 2025 were the Registry of Securities (RVP) and Central Registry of Securities JSC Banja Luka (CR HoV RS) in Bosnia and Herzegovina; AIX CSD and KCSD in Kazakhstan; Central Securities Depository AD Skopje in North Macedonia; National Depository of Ukraine (NDU); Central Securities Depository and Clearing House (CR HoV) in Serbia; and the Central Securities Depository of Turkey (MKK).
Asia-Pacific Central Securities Depository Group
The Asia-Pacific Central Securities Depository Group, or Asia-Pacific CSD Group (ACG), was also formed in November 1997.[6] As of early 2025, its membership was as follows.[7]
- Template:Flagicon Australian Securities Exchange (ASX)
- Template:Flagicon Bursa Malaysia Depository (Bursa Depository)
- Template:Flagicon Bursa Malaysia Securities Clearing (BMSC)
- Template:Flagicon Central Depository Bangladesh Limited (CDBL)
- Template:Flagicon China Central Depository & Clearing (CCDC)
- Template:Flagicon China Securities Depository and Clearing Corporation (CSDC)
- Template:Flagicon Central Depository Services Limited (CDSL)
- Template:Flagicon Central Securities Depository of Iran (CSDI)
- Template:Flagicon Kazakh Central Securities Depository (KCSD)
- Template:Flagicon CDS and Clearing Limited (CDSC)
- Template:Flagicon Central Depository Company of Pakistan (CDC Pakistan)
- Template:Flagicon Central Depository System of Sri Lanka (CDS)
- Template:Flagicon Central Securities Depository of Türkiye (MKK)
- Template:Flagicon Hong Kong Monetary Authority (HKMA)
- Template:Flagicon Hong Kong Securities Clearing Company (HKSCC)
- Template:Flagicon Indian Clearing Corporation Limited (ICCL)
- Template:Flagicon Indonesia Clearing and Guarantee Corporation (KPEI)
- Template:Flagicon Japan Securities Depository Centre (JASDEC)
- Template:Flagicon Korea Securities Depository (KSD)
- Template:Flagicon Multi Commodity Exchange Clearing Corporation Limited (MCXCCL)
- Template:Flagicon Maldives Securities Depository
- Template:Flagicon Mongolian Central Securities Depository (MCSD)
- Template:Flagicon Mongolian Securities Clearing Center (MSCC)
- Template:Flagicon NSE Clearing Limited
- Template:Flagicon National Securities Depository Limited (NSDL)
- Template:Flagicon New Zealand Central Securities Depository (NZCSD)
- Template:Flagicon National Clearing Company of Pakistan Limited (NCCPL)
- Template:Flagicon Kustodian Sentral Efek Indonesia (KSEI)
- Template:Flagicon Philippine Depository & Trust Corporation (PDTC)
- Template:Flagicon Royal Securities Exchange of Bhutan (RSEB)
- Template:Flagicon Shanghai Clearing House (SHCH)
- Template:Flagicon Singapore Exchange (SGX)
- Template:Flagicon Taiwan Depository and Clearing Corporation (TDCC)
- Template:Flagicon Thailand Securities Depository (TSD)
- Template:Flagicon Uzbekistan State Central Securities Depository
- Template:Flagicon Vietnam Securities Depository and Clearing Corporation (VSDC)
In addition, the ACG had five associate members: the Association of Global Custodians, Calastone, the Singapore branch of Deutsche Bank, HSBC Hong Kong, and SIX SIS Singapore.
Americas Central Securities Depositories Association
The Americas Central Securities Depositories Association (ACSDA, Template:Langx) was formed in 1999, with headquarters in Lima.[6] As of early 2025, its membership was as follows.[8]
- Template:Flagicon Caja de Valores
- Template:Flagicon Template:Ill (BYMA)
- Template:Flagicon Bahamas Central Securities Depository (BCSD)
- Template:Flagicon Barbados Central Securities Depository (BCSD)
- Template:Flagicon Bermuda Stock Exchange (BSX)
- Template:Flagicon Entidad de Depósito de Valores de Bolivia (EDV)
- Template:Flagicon Brasil, Bolsa, Balcão (B3)
- Template:Flagicon Canadian Depository for Securities (TMX CDS)
- Template:Flagicon Depósito Central de Valores (DCV)
- Template:Flagicon Depósito Centralizado de Valores de Colombia (Deceval)
- Template:Flagicon InterClear Central de Valores
- Template:Flagicon Central Bank of Costa Rica
- Template:Flagicon Central de Valores Dominicana (CEVALDOM)
- Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Eastern Caribbean Central Securities Depository (ECCSD)
- Template:Flagicon Depósito Centralizado de Compensación y Liquidación de Valores (Decevale)
- Template:Flagicon Central de Depósito de Valores (Cedeval)
- Template:Flagicon Central de Valores Nacional (CVN)
- Template:Flagicon Bank of Jamaica
- Template:Flagicon Jamaica Central Securities Depository (JCSD)
- Template:Flagicon Indeval
- Template:Flagicon Central Nicaragüense de Valores (Cenival)
- Template:Flagicon Central Latinoamericana de Valores (Latinclear)
- Template:Flagicon Bolsa de Valores de Asunción (BVA)
- Template:Flagicon CAVALI
- Template:Flagicon Trinidad and Tobago Central Depository
- Template:Flagicon Depository Trust & Clearing Corporation
- Template:Flagicon Central Bank of Uruguay
- Template:Flagicon Bolsa de Valores de Montevideo
- Template:Flagicon Caja Venezolana de Valores (CVV)
Association of Eurasian Central Securities Depositories
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The Association of Eurasian Central Securities Depositories (AECSD) brings together a number of central securities depositories (CSDs) in 9 countries of the former Soviet Union as well as India, Indonesia, Iran, Mongolia, South Korea, and Turkey. It was formed in Moscow in 2004, following a series of gathering of its would-be members in the previous three years.[9] As of early 2025, a majority of its members (9 of 16) were simultaneously members of the ACG:[10]
- Template:Flagicon National Depository Center of the Republic of Azerbaijan
- Template:Flagicon Central Depository of Armenia (CDA)
- Template:Flagicon Central Securities Depository of the Republic of Belarus
- Template:Flagicon Georgian Central Securities Depository (GCSD)
- Template:Flagicon National Securities Depository Limited of India (NSDL)
- Template:Flagicon Central Depository Services Limited of India (CDSL)
- Template:Flagicon Kazakh Central Securities Depository (KCSD)
- Template:Flagicon Central Depository of Kyrgyzstan
- Template:Flagicon National Settlement Depository of Russia (NSD)
- Template:Flagicon Central Securities Depository of Türkiye (MKK)
- Template:Flagicon Central Depository of Tajikistan
- Template:Flagicon Central Securities Depository of Uzbekistan
- Template:Flagicon Kustodian Sentral Efek Indonesia (KSEI)
- Template:Flagicon Central Securities Depository of Iran (CSDI)
- Template:Flagicon Mongolian Central Securities Depository (MCSD)
- Template:Flagicon Korea Securities Depository (KSD)
Africa & Middle East Depositories Association
The Africa & Middle East Depositories Association (AMEDA) was established in April 2005.[6] As of early 2025, its membership was as follows.[11]
- Template:Flagicon Abu Dhabi Securities Market
- Template:Flagicon Algérie Clearing
- Template:Flagicon Bahrain Clear Company
- Template:Flagicon Central Securities Depository of Botswana
- Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Template:Flagicon Dépositaire Central/Banque de Règlement of the West African Economic and Monetary Union (DC/BR)
- Template:Flagicon Dubai Central Securities Depository
- Template:Flagicon Misr for Central Clearing, Depository & Registry (MCDR)
- Template:Flagicon Egyptian Central Securities Depository (ECSD)
- Template:Flagicon Central Securities Depository (Ghana) Limited
- Template:Flagicon Iraqi Depository Center
- Template:Flagicon Securities Depository Center
- Template:Flagicon Central Depository & Settlement Corporation (CDSC Kenya)
- Template:Flagicon Kuwait Clearing Company
- Template:Flagicon Midclear
- Template:Flagicon Libyan Stock Market
- Template:Flagicon Central Depository & Settlement Co. Ltd. (CDS Mauritius)
- Template:Flagicon Maroclear
- Template:Flagicon Nigeria Central Securities Clearing System (CSCS)
- Template:Flagicon FMDQ Depository Limited
- Template:Flagicon Muscat Clearing & Depository (SAOC)
- Template:Flagicon Palestine Exchange (PEX)
- Template:Flagicon Edaa
- Template:Flagicon National Bank of Rwanda
- Template:Flagicon Edaa
- Template:Flagicon Strate CSD
- Template:Flagicon Khartoum Stock Exchange
- Template:Flagicon Damascus Securities Exchange
- Template:Flagicon CSD & Registry Company Limited
- Template:Flagicon Tunisie Clearing
- Template:Flagicon Central Securities Depository of Türkiye (MKK)
- Template:Flagicon Lusaka Securities Exchange
- Template:Flagicon Chengetedzai Depository Company
- Template:Flagicon Zimbabwe Stock Exchange
World Forum of CSDs
The World Forum of Central Securities Depositories, or World Forum of CSDs, brings together the ECSDA, ACG, ACSDA, AECSD, and AMEDA.[6]
See also
- Clearing house
- Custodian bank
- International Securities Services Association
- Securities market participants (United States)
References
External links
- World Forum of CSDs
- Asia Pacific Central Securities Depository Group
- European Central Securities Depositories Association
- America's Central Securities Depositories Association
- Association of Eurasian Central Securities Depositories
- Africa & Middle East Depositories Association Template:Webarchive
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- ↑ exchange-handbook.co uk article on the risks associated with Depositories, at the Handbook of world stock, derivative and commodity exchanges website.
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