IEIM400680 | Custodial Institution: Central Securities Depository

Central Securities Depository

In the UK a Central Securities Depository (CSD) will not be treated as maintaining financial accounts. The participants of UK securities settlement systems that hold interests recorded in the CSD are either Financial Institutions in their own right, or they access the system through a Financial Institution (a sponsor), or are not subject to reporting obligations. It is these Financial Institutions that maintain the accounts and it is these participants and/or sponsors that are responsible for undertaking any reporting obligations.

For example, members of the CREST securities settlement system (CREST system) operated by Euroclear UK & Ireland Limited (EUI), or the Financial Institution that accesses the CREST system on their behalf, are responsible for i) ensuring that the relevant member is compliant and ii) any reporting required by the agreement in respect of securities held by means of the CREST system. EUI acting as the CSD is not required to undertake any due diligence and reporting required by the agreement in respect of such securities.

This treatment will also apply to a UK entity which is a direct or indirect subsidiary used solely to provide services ancillary to the business operated by that CSD or CSD Related Entity.

The relationship between the securities settlement system and its participants is not a financial account and accordingly the CSD and any CSD Related Entity is not required to undertake any reporting required in connection with interests held by, or on behalf of, participants.

Notwithstanding the foregoing, the CSD may act as a third party service provider [see IEIM402000] and report on behalf of such participants in respect of reportable interests.