A central securities depository ( CSD ) is a specialized financial market infrastructure organization holding securities like shares , either in certificated or uncertificated ( dematerialized ) form, allowing ownership to be easily transferred through a book entry rather than by a transfer of physical certificates. This allows brokers and financial companies to hold their securities at one location where they can be available for clearing and settlement . This is usually done electronically, making it much faster and easier than was traditionally the case where physical certificates had to be exchanged after a trade had been completed.
32-797: National Securities Depository Limited (NSDL) is an Indian central securities depository , based in Mumbai . It was established in August 1996 as the first electronic securities depository in India with national coverage. It was established based on a suggestion by a national institution responsible for the economic development of India. At the end of 2023, its demat accounts held assets worth ₹398 Lakh Crore ($ 4.7 trillion). NSDL provides services to investors, stock brokers, custodians and issuer companies through its nationwide network of Depository Participants and digital platforms. National Securities Depository Limited (NSDL)
64-679: A custodian in Luxembourg. In 2015, the US court issued a decision dismissing the lawsuit. Arising from the above, the U.S. Treasury Department Office of Foreign Assets Control (OFAC) investigated certain securities' transfers in 2008 within Clearstream's settlement systems regarding US Iran sanctions regulations. These 2008 transfers had been undertaken as part of the decision taken by Clearstream in 2007 to close its Iranian customers' accounts. In 2013 Clearstream entered into settlement talks with OFAC. The matter
96-522: A guarantee by a borrower to secure a securities loan and subject to seizure in the event of default . Collateral management refers to the handling of all tasks related to the monitoring of collateral posted by a borrower to meet a financial obligation (optimisation, substitution, top-up, withdrawal, settlement instruction, reporting, processing of margin calls and returns, notification of corporate events, etc.). Clearstream's collateral management, securities lending and borrowing services are gathered under
128-614: A joint venture with the Spanish Central Securities Depository Iberclear, to act as a trade repository for derivatives transactions, helping participants meet their regulatory reporting obligations brought about by the introduction of the European Market Infrastructure Regulation (EMIR). Based in Luxembourg and Germany, Clearstream is subject to the supervision of the regulatory authorities of these two countries. In Luxembourg,
160-541: A national CSD rather than an ICSD, the US Depository Trust Company (DTC) does hold over $ 2 trillion in non-US securities and in American depositary receipts from over 100 nations. However, there are risks and responsibilities regarding these services that must be taken into consideration in analyzing and evaluating each market on a case-by-case basis. World Forum of CSDs Clearstream Clearstream
192-937: A security issue to the market , as they possess the necessary infrastructure for distributing the securities to the investors as well as for settlement and safekeeping. Clearstream's ICSD also provides custody services, which means that the security can be serviced throughout its entire lifecycle. Clearstream provides the infrastructure which enables issuers to reach investors worldwide. Clearstream's services include eligibility assessments, issuance and distribution of domestic, foreign and international (i.e. Eurobonds) new issues of global and domestic instruments: certificates of deposit , depository receipts , treasury bills , commercial papers , short-term and medium-term notes, bonds , equities , warrants , equity-linked notes and investment fund shares. Clearstream's ICSD settles trades in international securities and in domestic securities traded across borders. The CSDs settle domestic transactions in
224-469: Is a financial services company that specializes in the settlement of securities transactions and is owned by Deutsche Börse AG. It provides settlement and custody as well as other related services for securities across all asset classes . It is one of two European International central securities depositories ( Euroclear being the other). Clearstream operates securities settlement systems based in both Luxembourg and Germany , which allow for
256-457: Is an Indian central securities depository under the jurisdiction of Ministry of Finance, Government of India based in Mumbai. The enactment of Depositories Act, December 1995 paved the way for establishment of NSDL. It was established in 1995 as the first electronic securities depository in India with national coverage. And started the work in 1996. Although India had a vibrant capital market which
288-818: Is considerably lower as compared to transacting in physical certificates. NSDL introduced the concept of 'Demat' to India. In less than 8 years of its existence, NSDL enabled India securities markets to implement T+2 settlement. Indian markets are now implementing T+1 settlement in a phased manner. NSDL Group comprises National Securities Depository Limited (abbreviated as NSDL), NSDL Database Management Limited (NDML) and NSDL Payments Bank Limited. NDML and NSDL Payments Bank are two subsidiary companies of NSDL. It provides services related to demat of securities, transfer and settlement of securities in Indian Securities Market. Protean eGovernance Technologies (earlier known as NSDL e-Governance Infrastructure Limited)
320-556: Is opened in the name of a natural person. Clearstream has therefore been described as a "bank for banks". Clearstream has operational centres in Cork, Cardiff, Luxembourg, Prague and Singapore. It also maintains representative offices in London, Hong Kong, Tokyo, Dubai, New York, and Zurich. Clearstream was founded as "Cedel" (Centrale de Livraison de Valeurs Mobilières) in September 1970 by 66 of
352-872: Is regulated in each market where it has operational centres, for example by the Monetary Authority of Singapore . As the operator of securities settlement systems in both Luxembourg and Germany, Clearstream is additionally regulated by the central banks of these two countries, namely the Banque centrale du Luxembourg and the Deutsche Bundesbank . Clearstream is responsible for the management, safekeeping/custody and administration of securities (assets) under custody. Services include income and redemption payments, corporate actions as well as tax and proxy voting . The majority of securities safekept by Clearstream are immobilised . Securities are reflected in book-entry form in
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#1733084823651384-663: The 2022 Russian invasion of Ukraine , the Russian National Settlement Depository said on 25 March 2022 that Clearstream had blocked its account. Also, the ruble bridge between Clearstream and Euroclear was closed. Furthermore, Clearstream stopped settling trades in Russian securities. In July 2010, Clearstream founded LuxCSD together with the Luxembourg Central Bank, to act as a CSD for Luxembourg. In December 2010, Clearstream co-founded REGIS-TR,
416-659: The Commission de Surveillance du Secteur Financier (CSSF) is the prudential regulator with authority over all banks and financial service providers. In Germany, Clearstream is regulated as a bank according to the German Banking Act ("Kreditwesengesetz") and is therefore subject to the prudential supervision of the German Federal Financial Supervisory Authority (German: "Bundesanstalt für Finanzdienstleistungsaufsicht" - BaFin). Moreover, Clearstream
448-586: The Global Liquidity Hub. It provides a pool of liquidity through links to agent banks, trading platforms, clearing houses and other market infrastructures. Clearstream is a member of the Liquidity Alliance, which was established in January 2013 as a platform for CSDs to collaborate on collateral management. It was founded by ASX , Cetip, Clearstream, Iberclear and Strate. Clearstream has developed
480-404: The accounts of customers at Clearstream regardless of whether they are held in physical or dematerialised form. This means that they are no longer represented by physical certificates, but instead by data entered into the Clearstream systems. Securities financing is the ability to borrow or lend cash or securities against collateral . In securities financing, collateral comprises assets given as
512-407: The assets. Clearstream challenged the restraints and the handover. In 2011, the plaintiffs filed additional claims, this time directly against Clearstream, for damages of USD 250 million in connection with the purported wrongful conveyance of some of the restrained positions. Clearstream entered into a settlement agreement with the plaintiffs that became effective in 2013. The settlement provided for
544-435: The dismissal of the direct claims against Clearstream, and that the plaintiffs will not further sue Clearstream for damages and in return, Clearstream agreed to not further appeal an order directing the turnover of the restrained customer's assets to the plaintiffs. In 2013, a number of US plaintiffs from the 2011 case, as well as other US plaintiffs, filed a complaint targeting certain blocked assets that Clearstream holds as
576-401: The documents forgeries and dismissed the case. The controversy inspired the film The Clearstream Affair (2014). In 2008, several groups of plaintiffs commenced enforcement proceedings in the US to satisfy judgments which they had obtained against Iran by restraining certain positions held in a Clearstream securities account with its intermediary bank in the US, and asking for handover of
608-587: The globe. It contributes to majority of the settlement in the Indian securities markets and has more than 89% share in the total value of assets held in demat form in India. Central securities depository In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities transfers, securities pledges, and securities freezes. In modern corporate debt markets, investors achieve collateralization through CSDs. The CSDs operate as trustees for
640-488: The government and may or may not be separate from the exchanges where trading in securities occurs. An international CSD is a central securities depository that settles trades in international securities such as eurobonds although many also settle trades in various domestic securities, usually through direct or indirect (through local agents) links to local CSDs. Examples of international CSDs include Clearstream (previously Cedel), Euroclear and SIX SIS . While viewed as
672-657: The holding and transfer of securities. Clearstream operates its International Central Securities Depository (ICSD) from Luxembourg. It is also a joint partner in the Luxembourgish Central Securities Depository (CSD), LuxCSD, together with the Central Bank of Luxembourg . In Germany, Clearstream operates the German CSD, Clearstream Banking AG. Clearstream has links to over 50 domestic markets worldwide, and also issues and safekeeps Eurobonds . In 2014,
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#1733084823651704-420: The owners of the security whereby the collateral is stored and automatically transferred to the lenders in case of non-performance. A CSD can be national or international in nature, and may be for a specific type of security, such as government bonds . Many countries have one domestic CSD that was traditionally associated with the national stock exchange. These organizations are typically heavily regulated by
736-609: The sale of warships by the French defence giant Thales (known as Thomson-CSF before 2000) to Taiwan, and related bribes paid to French officials and businessmen. An investigation that included the search of Clearstream's premises and an examination of accounts in 2004 found no evidence supporting the accusations. In the same year, additional anonymous letters and CD-Roms sent to French judges accused Clearstream of running secret accounts for criminals and senior French politicians. In late 2005, French investigating authorities officially declared
768-423: The securities held and settled in de-materialized form in the Indian securities markets. Securities are held in depository accounts, which are similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment
800-438: The value of assets under custody on behalf of customers averaged 12.2 trillion euros; furthermore, Clearstream processed 43.65 million ICSD and 82.68 million CSD settlement transactions. Clearstream has around 2,500 customers in 110 countries. Clearstream accepts central banks and AML-regulated credit institutions (such as regulated banks) as customers. Clearstream does not accept natural persons as customers and no account
832-488: The world's largest cross-border fund processing platform, called Vestima. It handles all types of funds, from mutual funds to exchange-traded funds (ETFs) and hedge funds . In addition to providing access to all fund types, Vestima supports their cross-border distribution. Services offered by Vestima include order routing, centralised delivery versus payment (DVP) settlement, safekeeping, asset servicing and collateral management. ICSDs and CSDs are often used to bring
864-409: The world's major financial institutions as a clearing organisation whose objective was to minimise risk in the settlement of cross-border securities trading, particularly in the growing Eurobond market. In 1995, a new corporate structure was introduced, establishing a parent company — Cedel International — with a subsidiary company, Cedelbank; two years later, a new subsidiary — Cedel Global Services —
896-470: The worldwide centre for international financial crime committed by major banks, shell companies , and organised crime all over the world. An investigation opened by the Luxembourg authorities in 2001 found no evidence to support the authors' allegations, and the case was dismissed in 2004. In 2004, a list leaked to a French judge indicated that Clearstream was a money laundering organisation covering illegal activities of French businessmen who were involved in
928-470: Was a former subsidiary. It works on Digital Public Infrastructure and Open Source software as well as offers services related to issuance of PAN cards and also acts as central record-keeping agency for National Pension System (NPS). NSDL has more than 2.80 Crore demat accounts as of 30 June 2022. The market share of NSDL in value of demat assets is more than 89%. NSDL demat accountholders are present in more than 99% of pin codes in India and 189 countries across
960-451: Was established. Clearstream was formed in January 2000 through the merger of Cedel International and Deutsche Börse Clearing. The full integration of Clearstream was completed in July 2002. Between 2001 and 2002, two books were published by co-authors Denis Robert and Ernest Backes, entitled Révélation$ and La Boîte Noire , accusing Clearstream of being a money laundering organisation and
992-555: Was more than a century old, the paper-based settlement of trades caused substantial problems such as bad delivery and delayed transfer of title. The promulgation of the Depositories ordinance in 1995 paved the way for the establishment of National Securities Depository Limited (NSDL), the first depository in India. Now, NSDL is one of the largest Depositories in the World. It has established a state-of-the-art infrastructure that handles most of
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1024-436: Was resolved in 2014 through a settlement and payment of USD 151.9 million that does not constitute a final determination that a violation of Iran sanctions had occurred. The Russian depository blocked all securities held in Clearstream's account at the Russian depository, on 1 March 2022. The Russian depository also froze payments on securities of Russian issuers from being made to non-Russian individuals and entities. After
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