Central securities depository
A central securities depository (CSD) is a specialized
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]
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
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.[2]
See also
References
- ISSN 0022-0507.
- ^ exchange-handbook.co uk article on the risks associated with Depositories, at the Handbook of world stock, derivative and commodity exchanges website.
External links
- Forum
- 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 Archived 2013-05-21 at the Wayback Machine
- National CSDs
- Argentinian CSD
- Armenian CSD
- Oman CSD
- Australian CSD for government securities Archived 2010-12-08 at the Wayback Machine
- 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 Archived 2017-07-16 at the Wayback Machine
- Greek CSD
- Greek CSD for government securities
- Hong Kong CSD
- Hungarian CSD
- Icelandic CSD
- Indian CSD 1
- Indian CSD 2
- Indonesian CSD
- Iranian CSD Archived 2019-12-16 at the Wayback Machine
- 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 Archived 2011-11-07 at the Wayback Machine
- Moroccan CSD
- New Zealand CSD
- Nigerian CSD
- Norwegian CSD
- Pakistani CSD
- Peruvian CSD
- Philippine CSD
- Polish CSD
- Portuguese CSD
- Qatar CSD
- Romanian CSD Archived 2012-06-26 at the Wayback Machine
- 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