Central Securities Depository (CSD) policy and rules

Relevant to UK CSDs.

In this section

Domestic statutory framework

The UK’s domestic statutory framework for CSDs is agreed by Parliament. The framework is in the process of revision through the FSMA 2023 framework that largely came into effect at the start of 2024, including giving the Bank the power to make binding firm-facing rules over CSDs and repealing relevant elements of the domestic statutory framework. The list below will be updated as relevant as this process takes place.

CSDs must meet the requirements of the Uncertificated Securities Regulations 2001 as operators in order to operate a system supporting the electronic transfer of titles to UK securities.

CSDs are also regulated under Part 18 of the Financial Services and Markets Act 2000 (FSMA) as recognised central securities depositories.

They must comply with the requirements and obligations set out in Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories (the Central Securities Depositories Regulation (CSDR)). CSDR has been onshored and amended by the instruments in the right-hand column. 

Recognised clearing houses are regulated under Part 18 of FSMA 2000, and are subject to the recognition requirement regulations.

As noted above, this framework is in the process of revision.

 

 
CSDs must report their securities financing transactions under the Securities Financing Transactions Regulation.   
Part VII (Financial Markets and Insolvency) of the Companies Act 1989 also imposes certain obligations on recognised bodies (i.e recognised CSD and recognised clearing house), including the requirement to give the Bank of England notice of any proposal to amend, revoke or add to their default rules, and report on the completion of default procedures.   

There are two main Regulations made by HMT which make amendments to the UK settlement finality regime. 

The Settlement Finality Regulations allow payment and settlement systems to apply for certain protections against normal insolvency law in respect of transfers through their systems. To receive these protections, systems must meet the criteria set out in the regulations and be designated by the relevant authority.

  
The Financial Collateral Arrangements Directive (FCAD) was implemented through the Financial Collateral Arrangements (No. 2) Regulations 2003 (FCAR). The FCAR aims to streamline the use of financial collateral in the UK, simplifying enforcement procedures and addressing potential conflicts with insolvency law. It applies to both security financial collateral arrangements (where security is provided over collateral) and title transfer arrangements (where ownership is transferred with a promise of return).   

Bank of England guidance

The Bank may publish guidance on the interpretation of more detailed regulatory requirements for FMIs

The Bank’s approach to supervising CSDs is covered in its guidance on the Bank's approach to FMI supervision.    
The Bank has published a policy statement and supervisory statement that sets out the Bank’s supervisory approach to operational resilience.   
The Bank has published a supervisory statement that sets out the Bank’s supervisory approach to outsourcing and third party risk management.   
The Bank has published guidance on trade repository data collections, providing further detail on the requirements for CSDs to report securities financing transactions.   
The Bank and PRA have published a Statement of Policy on their approach to the interpretation of EU guidelines and recommendations after the UK’s withdrawal from the EU.   

Statements of Policy

The Bank may published statements of policy that set out how it will exercise its statutory powers over FMIs.

The Bank has published a Statement of Policy on its approach to enforcement. 
The Bank has published a Statement of Policy on its approach to statutory notice decisions for use of its requirements powers. 

International standards

The Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO) set out international standards for financial market infrastructures (FMIs), including central securities depositories (CSDs). These standards are not binding, but are implemented domestically through the domestic statutory framework and through Bank rules.

The Principles for financial market infrastructures are the international standards for financial market infrastructures. They are part of a set of 12 key standards that the international community considers essential to strengthening and preserving financial stability.   
The guidance on ‘Recovery of Financial Market Infrastructures’ sets out how FMIs such as CSDs should develop plans to enable them to recover from threats to their viability and financial strength, along with providing guidance to relevant authorities in carrying out their responsibilities associated with the development and implementation of recovery plans.   
The guidance on ‘Cyber resilience for financial market infrastructures’ sets out the preparations and measures that FMIs should undertake to enhance their cyber resilience capabilities in order to limit the risks that cyber threats pose to financial stability.   
These principles promote consistent disclosure of information by FMIs and consistent assessments by international financial institutions and national authorities.   

 

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This page was last updated 26 June 2025