Central securities depository

A central securities depository (CSD) is a specialized financial market infrastructure organization holding securities such as shares or bonds, 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.

In recent decades this has usually been 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.

The CSDs operate as trustees for the owners of the security whereby the collateral is stored and automatically transferred to the lenders in case of non-performance.

[2]: 39  Also in 1872, the Berliner Kassenverein [de] introduced a CSD-like service (German: Giro-Effekten-Depots), discontinued it two years later, and revived it on a permanent basis in 1882.

The United States adopted the CSD model with the creation of the Depository Trust Company in 1973 following coordinated initiatives of the financial industry in the late 1960s.