A central securities depository (CSD) is a post-trade infrastructure which provides a central point for depositing financial instruments (e.g., shares and bonds). CSDs enable securities transactions to be processed and settled by book entry, provide custodial services (e.g., the administration of corporate actions and redemptions) and play an active role in ensuring the integrity of securities issues.

Due to their relevance, CSDs were highly regulated entities on the national level but the cross-border dimension and passporting rules were scarce due to the lack of harmonisation at the European level. Addressing this issue, the European Central Securities Depositories Regulation (CSDR) was adopted and entered into force in September 2014 as one of the key regulations in the aftermath of the 2008 financial crisis.

The new regime ensured that the settlement is carried out in a safer and more efficient manner in Europe. It also includes a section applicable to the entire market, relating to the measures to avoid settlement fails in the market, also known as the Settlement Discipline Regime (SDR).

In 2022, the Commission initiated a proposal to amend CSDR with the aim of enhancing the efficiency of the EU’s settlement markets. Following an agreement reached between the co-legislators, the CSDR Refit entered into force in January 2024, with level 2 & 3 acts pending contributions from ESMA.

Deutsche Börse Group supports the harmonising of securities settlement and prudential rules for CSDs across Europe, as well as the SDR, in order to enhance market safety and create a level playing field.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.