What is a CSD?

csdA central securities depository (CSD) is a financial organisation that specialises in holding securities. A CSD organisation may be for a specific type of security, such as government bonds. These securities are either certificated or uncertificated in form so that ownership can be easily transferred electronically without the need for physical certificates. This means that brokers and financial companies can hold their securities at a single location for clearing and settlement. Some CSD organisations also carry out centralised comparison, and transaction processing such as clearing and settlement of securities.

National central securities depository (CSD)

A CSD can be national or international. Many countries have one domestic CSD that is traditionally associated with the national stock exchange. These organisations are usually heavily regulated by the government and may sometimes be separate from the security trading exchanges.

International central securities depository (ICSD)

An international CSD settles trades in international securities such as eurobonds although many also settle trades in various domestic securities, either directly or through local agents. International CSDs include Clearstream, Euroclear and SIX SIS.



1. Safekeeping Securities may be in de-materialised (uncertificated) form, book-entry only form (with one or more ‘global’ certificates), or in physical form immobilised within the CSD.
2. CSD’s support deposits and withdrawals. This involves a relationship between the transfer agent and/or issuers and the CSD. CSD’s also have a role in the underwriting process or listing of new issues in a market.
3. Dividend, interest, and principal processing, as well as corporate actions including proxy voting. Depending on the level of services provided by the CSD, some act as paying and transfer agents, as well as issuers.
4. In addition to the above core services, CSD’s can also provide securities lending and borrowing, matching, and repurchase agreement, or ISIN assistance.
5. Central depositories provide pledging of share and securities. Every country is required to provide a legal framework to protect the interest of the pledger and pledgee.
There are risks and responsibilities regarding the financial services provided by a CSD. Each market should be analysed and evaluated on a case-by-case basis.