CSD Regulation

Central Securities Depositories Regulation

Central Securities Depositories (CSDs) are Financial Market Infrastructures (FMIs) alongside Trading Venues, Central Counterparties (CCPs), Trade Repositories and Payment Systems. Like CCPs they contribute to a large degree in maintaining the financial stability.

In October 2010, the Financial Stability Board called for more robust FMIs and for a reinforcement of the existing standards this resulting in the publication the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO), in 2012, of the Principles for financial market infrastructures (PFMI).The PFMI recalled that “a central securities depository provides securities accounts, central safekeeping services, and asset services, which may include the administration of corporate actions and redemptions, and plays an important role in helping to ensure the integrity of securities issues (that is, ensure that securities are not accidentally or fraudulently created or destroyed or their details changed)”. The conclusion made is that “CSDs play a critical role in the protection of securities and help ensure the integrity of securities transactions”.

CSDR, following MIFID2/MIFIR (covering Trading Venues) and EMIR (focused on CCPs), addresses the CSD’s topic in Europe by giving the latter a regulatory framework in which they can exercise their function meanwhile requiring several measures to improve the settlement and to reinforce the investor protection.

CSDR is built on four main pillars:

1. Infrastructure, by laying down a unified and harmonised framework for all European CSDs
  • Defining a CSD, its role and its responsibilities
  • Establishing a set of common requirements for CSDs operating securities settlement systems
  • Freeing the choice of an issuer CSD for issuers
  • Requiring CSDs to have a recovery plan
2. Strengthening the Investor Protection
  • Dematerialization or immobilisation of securities, book-entry form for transferable securities
  • Segregation of investors’ assets
3.Improvement of the settlement
  • Reduction of the settlement cycle
  • Reinforcement of the obligation to settle transactions in transferable securities, money-market instruments, units in collective investment undertakings or emission allowances on the date agreed between the parties (also called: ISD for Intended Settlement Date)
  • Imposition of a settlement disciplines regime: set of several measures aiming to prevent and address settlement fails and thus have a transaction be fully settled on ISD
4. Transparency
  • Setting obligations of reporting to national competent authorities and ESMA
  • Identification of the issuing entities via the use of LEI (Legal Entity Identifier)


Initiation Date: 17 September 2014

SGSS/CAO/REG contact : Pierre Colladon  - Sylvie Bonduelle


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