IMF How To Notes

How to Organize Central Securities Depositories in Developing Markets: Key Considerations

Author/Editor:

Froukelien Wendt ; Peter Katz ; Alice Zanza

Publication Date:

February 4, 2019

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

The key objective of this note is to support authorities in their decision making about the optimal organization of central securities depositories (CSDs) in their country. For the purpose of this note, a CSD is defined as an entity that provides securities accounts, a securities settlement system, and central safekeeping services to market participants, which can be banks and other financial institutions. Authorities in developing markets, in particular central banks, may grapple with two questions: (1) whether to pursue a single CSD to increase market efficiencies and benefit from economies of scale and scope and (2) whether to partake in the governance of the CSD as owner or operator. This note presents seven considerations for authorities to take into account when answering these questions and determining the best model for their country.

Series:

How-To Note No. 2019/001

Subject:

Central securities depositories Financial institutions Financial markets Government securities Securities Securities markets Stock markets