Central securities depository

Central securities depository
A central securities depository (CSD) is a specialized financial organization holding securities like shares, 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. This is usually 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.
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 (previously Cedel), Euroclear 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.
See also
Clearing house
Custodian bank
Securities market participants (United States)
References
External links
CSD Associations
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
National CSDs
Argentinian CSD
Armenian CSD
Oman CSD
Australian CSD for government securities
Australian CSD for equities and corporate bonds
Austrian CSD
Azerbaijan CSD
Bangladesh CSD
Bahrain CSD
Belgian CSD
Belgian CSD for government securities
Bosnian and Herzegovian CSD
Brazilian CSD for equities
Brazilian CSD for coporporate bonds
Brazilian CSD for government securities
Bulgarian CSD
Canadian CSD
Chilean CSD
Chinese CSD
Croatian CSD
Cypriot CSD
Czech CSD
Danish CSD
Egyptian CSD
Estonian CSD
Finnish CSD
French CSD
German CSD
German CSD for government securities
Greek CSD
Greek CSD for government securities
Hong Kong CSD
Hungarian CSD
Icelandic CSD
Indian CSD 1
Indian CSD 2
Indonesian CSD
Iranian CSD
Irish CSD
Israeli CSD
Italian CSD
Japanese CSD
Japanese CSD for government securities
Latvian CSD
Lithuanian CSD
Macedonian CSD
Malaysian CSD
Maldivian CSD
Maltese CSD
Mexican CSD
Mongolian CSD
Moroccan CSD
New Zealand CSD
Nigerian CSD
Norwegian CSD
Pakistani CSD
Peruvian CSD
Philippine CSD
Polish CSD
Portuguese CSD
Qatar CSD
Romanian CSD
Romanian CSD for government securities
Russian CSD
Serbian CSD
Singapore CSD
Slovak CSD
Slovenian CSD
South African CSD (GraniteCSD)
South African CSD
South Korean CSD
Spanish CSD
Sri Lankan CSD
Swedish CSD
Swiss CSD
Taiwanese CSD
Thai CSD
Tunisian CSD
Turkish CSD
Ukrainian CSD
UK CSD
Uruguayan CSD
US CSD
US CSD for government securities
Venezuelan CSD
Vietnamese CSD
Zimbabwean CSD
International CSDs
Euroclear Bank
Clearstream Banking Luxembourg, CBL
SIX SIS
globeSettle
Payment systems
Securities (finance)
Central securities depositories
Financial law