Central securities depositories (CSDs)

What the EU is doing and why

Central securities depositories play a central role in the EU's capital markets and financial system, as they operate the infrastructure that enables the settlement of securities (such as shares or bonds) in financial markets. 

Settlement ensures that the buyer receives the securities and the seller receives the payment. Currently, it can take up to two business days to settle a transaction traded on a securities exchange, which can result in both credit and legal risks during that period. Ensuring that these transactions are settled in a safe and efficient manner is therefore essential for the EU's financial system.

In particular, CSDs:

• allow the registration and safekeeping of securities;
• allow the settlement of securities in exchange for cash;
• track how many securities have been issued and by whom; and
• track each change in the ownership of these securities.
   

New rules on Central Securities Depositories

Regulation (EU) 2023/2845 (‘CSDR Refit’) which amends the Central Securities Depositories Regulation (CSDR) entered into force in mid-January 2024. It enhances the efficiency of the EU's settlement markets, while safeguarding financial stability. It ensures more proportionate and effective rules to reduce compliance costs and regulatory burden for central securities depositories, as well as facilitate their ability to offer services cross-border, while simultaneously improving their cross-border supervision.

Relevant legislation