Central Securities Depository

There is, moreover, the desire that all these services should be able to be performed by both banks and central securities depositories.

The association regularly publishes research reports on central securities depositories (CSDs), including technical standards, settlement statistics, market discipline and regulatory issues.

The report harmonizes and strengthens the existing international standards for systemically important payment systems, central securities depositories, securities settlement systems, and central counterparties.

Items 11 and 12 explore the most desirable way of organising securities trading settlement services and the relationship between the central securities depositories and the custodian banks.

For the securities leg, the T2S platform will settle via the securities accounts of connected central securities depositories (CSDs).

Euroclear (in Brussels, Belgium) and Clearstream (in Luxembourg) are the second and third largest central securities depositories in the world.

The top tier comprises "national" and "international central securities depositories" (CSDs), where large pools of securities of different issuers are immobolised or otherwise concentrated.

The support to build the T2S was subsequently confirmed by a memorandum of understanding (MoU) signed in 2009 between the Eurosystem and 28 European central securities depositories (CSDs).

The trade verification process concludes when the affirmation has been completed and then the clearing and settlement process begins, which also involves custodians, central securities depositories (CSDs), and other participants in the post-trading value chain.

The European Code of Conduct for Clearing and Settlement (Code of Conduct) is an initiative of European securities exchanges, clearing houses and central securities depositories to set a uniform rules for trading, clearing, settlement and custody services for stocks.

The message in these points, put in just a few words, is that core functions in settlement should be properly determined, and the central securities depositories and the settlement institutions should practise these with a view to making a profit and under the supervision of users, whereas those offering services must be kept separate from the others.

Criticism of the report has focussed on two aspects; one being the idea of a government body for 'core' settlement services, and hence of restricting the services of international central securities depositories to 'core' settlement services, and the other the idea of non-profit status, many being of the opinion that this would preclude competition.