CSDs

Central Securities Depositories (CSDs) are financial market infrastructures that hold securities in custody and settle ownership transfers on a book-entry basis. They provide safekeeping, settlement, and asset servicing for a range of securities, including equities, bonds, and money market instruments. Settlement is typically conducted on a delivery-versus-payment (DvP) basis to mitigate counterparty risk, ensuring that delivery of securities occurs if and only if payment occurs.

CSDs maintain securities accounts for issuers, investors, and intermediaries, and they handle corporate actions, income distributions, and other post-trade processes. They may also immobilize or dematerialize physical certificates as part of modernization. Access to CSD services can be direct for participants or indirect through custodians.

While many countries operate domestic CSDs, the system supports cross-border settlement through networks and international depository arrangements. Major examples include Euroclear Bank and Clearstream (Europe), the Depository Trust Company (DTC) in the United States, and Japan’s JASDEC. In India, the Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL) provide domestic CSD services. The UK's CREST operates within the Euroclear UK & Ireland group.

CSDs are regulated by national authorities and must comply with international standards such as the CPSS-IOSCO Principles for Financial Market Infrastructures, focusing on settlement finality, risk management, and governance.