2014 CSD Factbook now available
24 Sep 2015 – This year’s edition of the Factbook offers an up-to-date overview of the CSD landscape in Europe.
A steady increase in the value of securities held on CSD accounts…
From 2013 to 2014, the total value of securities held at ECSDA members increased by 7% to reach EUR 51 billion. This increase adds to the generally positive trend since 2010.
… and in the volume of securities deliveries
Over the year, European CSDs collectively processed around 471 million delivery instructions. This number excludes MKK, the Turkish CSD, which alone processed 187 million instructions. In terms of value, these delivery instructions represented over EUR 1.16 quadrillion, slightly above last year’s settlement volumes but still below the peak in 2011.
A wide array of financial instruments
All European CSDs settle equities and the overwhelming majority settle corporate bonds and government securities. Besides, more than 80% of CSDs have developed services for investment funds, not only limited to settlement but also including order routing and valuation services. Other instruments accepted for settlement include Depository Receipts, cooperative share units, asset backed securities and structured products.
Diverse ownership models
In the EU, stock exchanges represent the main shareholder category for CSDs, whereas other European CSDs outside the EU are characterised by a stronger involvement of the State in the CSD capital. In both EU and non-EU CSDs, CSD participants represent on average close to a third of CSD owners. The following pie chart shows the proportion of shareholders from different categories in a theoretical CSD aggregating data from all 41 ECSDA members:
An international client base
CSD participants are typically wholesale financial firms. Leaving the two ICSDs aside (since by nature they do not operate in a domestic environment), European CSDs had on average 18% of non-domestic participants in 2014. That said, the rate tends to be higher in countries with a high degree of regional integration (e.g. Benelux, Nordics).
54% of European CSDs maintain end investor accounts in their books, although not all of them operate a pure direct holding model. As a result of different market practices as regards account holding structures, the number of securities accounts maintained by a CSD varies considerably from country to country (from less than 1,000 accounts to more than 10 million).
Other interesting facts on European CSDs
- With the exception of Ireland, all EU countries have a CSD operating on their territory. Belgium hosts 3 CSDs (including one operated by the central bank), and Luxembourg 4 (including VPLux which is a subsidiary of VP, the Danish CSD).
- EU CSDs are subject to the CSD Regulation, which entered into force on 17 September 2014 and regulates all CSD activities. All European CSDs have to comply with the international oversight Principles of CPMI and IOSCO.
- 7 ECSDA members operate with a banking license and are therefore subject to the relevant banking laws.
- The vast majority of European CSDs (85%) operates an RTGS or “real-time gross settlement” model. Other settlement models involve some form of netting, for cash and/or securities, and are typically used for on-exchange transactions.
- ECSDA members collectively employ more than 7,800 people, among which 82% are employed by EU-based CSDs. Excluding the two ICSDs, the average European CSD has slightly more than 100 employees.