A central securities depository (CSD) is a financial institution that holds and manages securities, such as stocks and bonds, in electronic form. It facilitates the settlement of transactions by ensuring that the ownership of these securities is accurately recorded and transferred between buyers and sellers. This process helps to reduce risks and increase efficiency in the financial markets. CSDs play a crucial role in the overall functioning of the financial system by providing services like safekeeping, clearing, and settlement. They also help to streamline the issuance of new securities, making it easier for companies to raise capital. Examples of CSDs include Euroclear and Depository Trust Company (DTC).