Central securities depositories (CSDs) ensure quick settlement and safe custody of securities by operating securities accounts, providing central custodial services and offering services around dividend and interest payments, for example. As a critical post-trading infrastructure, CSDs perform a crucial function for the European financial system. This means they also have an important role to play in further integrating capital markets in the EU, thus making them more efficient and competitive. Central banks, too, have a keen interest in CSDs functioning reliably, particularly from the vantage point of financial stability, not least because CSDs are integral to the collateralisation of central bank monetary policy operations.
To account for the particular role of CSDs, the EU established the Regulation on improving securities settlement in the EU (the Central Securities Depositories Regulation, or CSDR) as an effective supervisory and oversight regime applicable to all EU CSDs.
