9 Regulation, Supervision, and Oversight

Subject(s):

Central Securities Depository (CSD) — Intermediated securities — Issue and trading of securities — Securities settlement system

This chapter discusses securities trading and settlement volumes that have soared as securities markets have become an increasingly important channel for intermediating flows of funds between borrowers and lenders and as investors have managed their securities portfolios more actively. It explores volumes of cross-border trades and settlements that have grown rapidly and have reflected the increasing integration of global markets. It also mentions the central securities depositories (CSDs), securities settlement systems (SSSs), custodians, and intermediaries that constitute the backbone of the post-trade securities infrastructure. The chapter reviews weaknesses in the underlying infrastructure for the holding and settlement of securities, which can be a source of systemic disturbances to securities markets and other parts of the financial system. It examines how intermediation can pose risks to safeguarding and administering the property of third parties.