We are the competent authority for issues related to trading venues and investment firms. We explain Central Securities Depositories Regulation and settlement internalisation.
A central securities depository (CSD) is an institution that holds financial instruments, including equities, bonds, money market instruments and mutual funds.
It allows ownership of those instruments to be transferred in electronic form through updating electronic records which are often known as ‘book-entry records’.
The UK CSD is Euroclear UK and Ireland (EUI). The Bank of England is the competent authority for the authorisation, supervision and policy for EUI.
Central Securities Depositories Regulation (CSDR)
CSDR sets out authorisation and supervision requirements for UK CSDs and certain settlement aspects.
CSDR sets a standard securities settlement cycle of T+2 (with ‘T’ meaning the date of trade and the settlement of this trade being 2 days after the trade). This has been effective in the UK since 6 October 2014.
The UK will transition to a T+1 standard securities settlement cycle on 11th October 2027. The Government has confirmed that it will make the corresponding legislative change to CSDR. Please visit our T+1 webpage[1] for further detail.
For more information on CSDR and other related legislation, see:
Settlement Internalisation Reporting
Since July 2019, firms have been required to report settlement internalisation to the Bank of England under Article 9 of CSDR.
Under this regulation, an institution is considered to be a settlement internaliser if it executes transfer orders on behalf of clients or on its own account other than through a securities settlement system.
What firms should do
For more information about settlement internalisation reporting, firms should refer to the Bank of England’s website[2].
