CEDEL is an acronym for "Central Depository for Securities Limited," which is a Luxembourg-based company that specializes in providing securities settlement and custody services. It operates as a central securities depository (CSD) and acts as an intermediary between financial institutions, facilitating the efficient and secure transfer of securities.
As a CSD, CEDEL serves as the central hub for recording and managing ownership rights to various types of securities such as stocks, bonds, and derivatives. Its primary function is to hold these securities in electronic form, reducing the need for physical certificates and enabling faster and more accurate transactions. CEDEL provides a centralized platform for the safekeeping, clearing, and settlement of securities, ensuring that ownership changes are executed smoothly and securely.
One of the key features of CEDEL is its network of participant banks, which are authorized entities that hold securities on behalf of their clients. These banks maintain accounts with CEDEL and use its services to settle trades and manage their clients' securities portfolios. CEDEL also offers value-added services like corporate actions processing, income collection, and reporting.
Overall, CEDEL plays a vital role in the global financial system by providing infrastructure services that enhance the efficiency, transparency, and safety of securities transactions. Its secure and reliable operations contribute to the smooth functioning of the capital markets, enabling investors, financial institutions, and corporations to engage in securities trading with confidence.
