Segregation, Record-keeping & Disclosures / July 2019
Record-keeping & Segregation:
Records must enable any participant to:
1. Segregate the securities of the participant from those of the participant’s clients;
2. Hold in one securities account the securities that belong to different clients of that participant (OSA - omnibus client segregation);
3. Segregate the securities of any of the participant’s clients, if and as required by the participant (ISA - individual client segregation).
A CSD participant shall offer its clients at least the choice between omnibus client segregation and individual client segregation and inform them of the costs and risks associated with each option.
Reconciliation: CSDs must:
1. Compare the previous end-of-day balance with all the settlements processed during the day and the current end-of- day balance for each securities issue and securities account centrally or not centrally maintained by the CSD;
2. Use double-entry accounting, according to which, for each credit entry made on a securities account maintained by the CSD, centrally or not centrally, there is a corresponding debit entry on another securities account maintained by the same CSD;
3. Ensure its participants reconcile their records on a daily basis.
CSDs and their participants shall publicly disclose the levels of protection and the costs associated with the different levels of segregation that they provide and shall offer those services on reasonable commercial terms. Details of the different levels of segregation shall include a description of the main legal implications of the respective levels of segregation offered, including information on the insolvency law applicable in the relevant jurisdictions.