CSDR - the Central Securities Depositories Regulation

Central securities depository

A central securities depository (CSD) is a specialist financial organization holding securities such as shares either in certificated or uncertificated (dematerialized) form so that ownership can be easily transferred through a book entry rather than the 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.


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.


  • 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

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