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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 Book entry is a system of tracking ownership of securities where no certificate is given to investors. Several terms are often used interchangeably with "book entry" shares including "paperless shares", "electronic shares", "digital shares", "digit ...
rather than by a transfer of physical certificates. This allows
brokers A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confu ...
and financial companies to hold their securities at one location where they can be available for clearing and
settlement Settlement may refer to: * Human settlement, a community where people live *Settlement (structural), the distortion or disruption of parts of a building *Closing (real estate), the final step in executing a real estate transaction *Settlement (fin ...
. 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 Eurobond may refer to: * Eurobond (external bond), a bond issued that is denominated in a currency not native to the country where it is issued * Eurobond (eurozone) Eurobonds or stability bonds were proposed government bonds to be issued in ...
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 Clearstream is a financial services company that specializes in the settlement of securities transactions and is owned by Deutsche Börse AG. It provides settlement and custody as well as other related services for securities across all asset c ...
(previously Cedel),
Euroclear Euroclear is a Belgium-based financial services company that specializes in the settlement of securities transactions, as well as the safekeeping and asset servicing of these securities. It was founded in 1968 as part of J.P. Morgan & Co. to set ...
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 receipt An American depositary receipt (ADR, and sometimes spelled ''depository'') is a negotiable security that represents securities of a foreign company and allows that company's shares to trade in the U.S. financial markets. Shares of many non-U.S ...
s 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 In finance, securities lending or stock lending refers to the lending of securities by one party to another. The terms of the loan will be governed by a "Securities Lending Agreement", which requires that the borrower provides the lender with co ...
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. exchange-handbook.co uk article
on the risks associated with Depositories, at the ''Handbook of world stock, derivative and commodity exchanges'' website.


See also

*
Clearing house Clearing house or Clearinghouse may refer to: Banking and finance * Clearing house (finance) * Automated clearing house * ACH Network, an electronic network for financial transactions in the U.S. * Bankers' clearing house * Cheque clearing * Cle ...
*
Custodian bank A custodian bank, or simply custodian, is a specialized financial institution responsible for providing securities services. It safeguards assets of asset managers, insurance companies, hedge funds, and is not engaged in "traditional" commercial ...
* 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





Austrian CSD

Azerbaijan CSD

Bangladesh CSD

Bahrain CSD

Belgian CSD



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



Hungarian CSD

Icelandic CSD

Indian CSD 1

Indian CSD 2

Indonesian CSD

Iranian CSD

Irish CSD

Israeli CSD

Italian CSD

Japanese CSD



Latvian CSD

Lithuanian CSD

Macedonian CSD



Maldivian CSD

Maltese CSD

Mexican CSD

Mongolian CSD

Moroccan CSD



Nigerian CSD

Norwegian CSD

Pakistani 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



Swiss CSD





Tunisian CSD

Turkish CSD

Ukrainian CSD

UK CSD

Uruguayan CSD

US CSD



Venezuelan CSD



Zimbabwean CSD
{{div col end ; International CSDs
Euroclear Bank

Clearstream Banking Luxembourg, CBL

SIX SIS

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