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.
Policy making timeline
- 18 June 2025Political agreement - Shorter settlement cycle for EU securities
- 12 February 2025Legislative proposal - Shorter settlement cycle for EU securities
- 15 October 2024Statement - Securities settlement cycle
- 28 June 2023Legislation - CSDR Refit
- 16 March 2022Legislative proposal - CSDR Refit
- 1 July 2021Report - Central securities depositories
- 8 December 2020Consultation - Central securities depositories
- 8 October 2020Resolution - Capital markets union
- 24 September 2020Action plan - Capital markets union
Central Securities Depositories Regulation Refit (CSDR Refit) - (EU) 2023/2845
Basic information
Legislative history
- Original legislative proposal for the CSDR Refit
- Impact assessment accompanying the legislative proposal for the CSDR Refit
- Executive summary of the impact assessment accompanying the legislative proposal for the CSDR Refit
- History of the legislative initiative on central securities depositories (review of EU rules)
Central Securities Depositories Regulation (CSDR) - (EU) No 909/2014
Settlement across borders presents higher risks and costs for investors within one country. To harmonise rules in this area the EU has adopted a Regulation on CSDs.
The main objective of the regulation is to increase the safety and efficiency of securities settlement and settlement infrastructures in the EU. It does this by introducing
- shorter settlement periods
- cash penalties and other deterrents for settlement fails
- strict organisational, conduct of business and prudential requirements for CSDs
- passport system allowing authorised CSDs to provide their services across the EU
- increased prudential and supervisory requirements for CSDs and other institutions providing banking services that support securities settlement
Basic information
- Text of the CSDR (Regulation (EU) No 909/2014)
- Summary of the legislation: Improving securities settlement in the EU