An entity that:
- enables securities transactions to be processed and settled by book entry
- provides custodial services (e.g. the administration of corporate actions and redemptions)
- plays an active role in ensuring the integrity of securities issues. Securities can be held in a physical form or in a dematerialized form, i.e. electronic records.
Securities holdings can come in two forms:
- direct: each beneficiary owner has an account
- indirect: intermediaries such as custodians or brokers hold securities on behalf of clients.
Often a CSD will also serve as a securities settlement system (SSS).