Europe Boosted By CSD Network, Finds Association

The European CSD Association (ECSDA), has found that 34 out of 41 central securities depositary’s (CSD) in the Eurosystem have established both inbound and outbound ‘direct links’, according to data collected in the second half of 2014.

The findings will be welcomed by market participants, as the establishment of direct links is vital to facilitate cross-border securities transactions and settlement.

ECSDA found only four out of the 41 CSDs had no links at all with other CSDs, and three only maintained inbound links, allowing foreign CSDs access to their local markets. These seven CSDs are based in Slovenia, Montenegro, Estonia, Bosnia and Herzegovina, Iceland, Macedonia and Serbia.

Excluding Europe’s three biggest CSDs (Clearstream, Euroclear and SIX SIS), the average European CSD had just under seven direct links to other markets.

The improvements in CSD linkage and accessibility for market participants will boost the anticipated launch of Europe’s incoming settlement platform, TARGET2 Securities, which allows seamless access for CSDs in different markets.

According to the ECSDA, “It will be interesting to see whether the number of CSD links increases substantially among participating CSDs after T2S is fully implemented in 2017.”