Central Securities Database

The Centralised Securities Database (CSDB) is a single information technology infrastructure that is operated jointly by the members of the European System of Central Banks (ESCB)

The CSDB also includes national central banks (NCBs) of non-euro area Member States where such NCBs voluntarily participate in the operation of the CSDB. The CSDB stores item-by-item data, in particular, data on securities, their issuers and prices.[1][2]

Aims

The aim of the CSDB is to hold complete, accurate, consistent and up-to-date information on all individual securities relevant for the statistical purposes of the ESCB. This means securities issued by EU residents; securities likely to be held and transacted in by EU residents; and securities denominated in euro, whoever the issuer is and wherever they are held. The CSDB contains information on over five million debt securities, equities and mutual fund shares/units issued by residents of EU Member States or by others.[3][4][5]

History

Since spring 2009 the European System of Central Banks (ESCB) runs the current “Phase 2” of its Centralised Securities Database (CSDB) platform. The CSDB covers debt securities, equity securities as well as investment fund shares where each security is identified by its ISIN code and defined by more than 50 individual attributes. Regarding the geographical coverage, the system includes all of the above securities issued by European Union (EU) residents, all securities potentially held by EU resident investors and all securities issued worldwide which are denominated in euro. In spring 2013 the CSDB covers about 7 million active securities in total [6][7]

The CSDB is a joint project of the ECB and the national central banks in the euro area. Its implementation was a basic prerequisite for the introduction of security-by-security systems throughout the ESCB. The common use of reference data is ultimately intended to ensure the consistency and comparability of securities statistics in the Eurosystem and increase the efficiency of data procurement. The CSDB basically contains information on all securities denominated in euro. Furthermore, all securities which are issued, held or traded by EU residents are also included. Therefore, securities holdings can be calculated by nominal or by market values. For the latter, the CSDB data on the reporting date are used. Securities listed in a foreign currency are available in the original currency and in euro. Currently, the CSDB covers the attributes of over five million debt securities, equities and mutual fund shares. The main data providers for the CSDB are the national central banks of the ESCB as well as some commercial data suppliers. The most important securities attributes for the ESCB statistics system in the CSDB can be classified into the following groups:

• Issuer information (Issuer domicile country, Issuer ESA 95 sector, ...) • Instrument information (ISIN code, Instrument ESA 95 class, ...) • Price data information (Nominal currency, Quotation basis, Price value, ...)[8]

Governance structure and operational framework

A certain minimum governance structure is needed in running a supranational securities database of such ambition and complexity. Common agreements are needed on the scope and financial budget of the project; the technical framework, its maintenance and development; as well as on methodological issues. Furthermore, arrangements have to be put in place for the development and regular review of the operational framework and the business procedures (including the tasks, processes and quality benchmarks for the database and the statistics produced on this basis) as well as for the sharing of financial, human and IT resources.

In addition, legal clarity is needed as to the possibility of exchanging confidential data and the terms of usage of commercial source data. The former aspect is addressed in Europe by supranational statutes and guidelines. The same goes for many of the arrangements set out above, in particular the mutual financing of the CSDB project by the ECB and the 19 central banks of the euro area.[9][10]

Uses

To provide a single securities database platform with centrally managed access which can serve all uses of a central bank. With the set-up of the CSDB the ESCB has developed a single and consistent securities database platform which even serves all 28 national central banks (NCBs) of the EU [6][11][12][13][14] [15]

Benefits

Reference data (information about prices, ratings, etc.) has often been cited as an area of difficulty for Solvency II asset reporting. Data licensing rules can limit the use and sharing of information with third parties, and data variations across vendors can produce inconsistent figures.

For its asset reporting the ECB only requires a small number of details about each asset. For securities and shares, generally speaking, these include identification and the amount held in the portfolio, which eliminates many of the problems associated with reference data.

The ECB uses a single set of reference data for all the securities information it collects. The CSDB holds information on almost all of the securities traded in the euro area. It is a proprietary database, which also relies on information from commercial providers.

Mr Ugazio explained how having a single source from the reference data both simplifies the data collection process and improves analytical capabilities. “This basically means that when an entity reports the list of its asset holdings it is sufficient for the national central bank to simply receive the ISIN code and the nominal amount held for each instrument. Then, using the CSDB, the statistical compilers can not only aggregate all sorts of breakdowns from the granular information, but also derive, for example, price changes and from these infer net disposals and acquisitions of the instrument.”

Insurers, of course, are being asked to obtain and report the reference data because Solvency II requires them to have a full understanding of the risk in their portfolio of assets.[6][15][16][17][18][19][20] [21]

References
  1. https://www.ecb.europa.eu/ecb/legal/pdf/l_30720121107en00890103.pdf
  2. https://www.imf.org/external/pubs/ft/bop/2007/07-25b.pdf
  3. https://www.ecb.europa.eu/pub/pdf/other/centralisedsecuritiesdatabase201002en.pdf
  4. http://www.bde.es/f/webbde/Agenda/Eventos/06/Mar/Fic/19.Pronk.pdf
  5. http://www.statistics.gov.hk/wsc/STS082-P4-S.pdf
  6. http://www.bis.org/ifc/publ/ifcb37e.pdf
  7. "Archived copy" (PDF). Archived from the original (PDF) on 2015-02-21. Retrieved 2015-02-21.CS1 maint: archived copy as title (link)
  8. "Archived copy" (PDF). Archived from the original (PDF) on 2013-05-02. Retrieved 2015-02-21.CS1 maint: archived copy as title (link)
  9. http://www.bis.org/ifc/publ/ifcb29x.pdf
  10. http://www.financialinformationsummit.com/digital_assets/317/gerard-salou.pdf
  11. http://www.tffs.org/pdf/meet/2009/ecb0309.pdf
  12. http://www.federalreserve.gov/pubs/feds/2011/201131/201131pap.pdf
  13. http://www.bankofengland.co.uk/statistics/Documents/ms/articles/art2may14.pdf
  14. "We have moved!". www.bundesbank.de. Archived from the original on 2019-01-29. Retrieved 2019-02-05.
  15. "Page Not Found (404) - Central Bank of Ireland" (PDF). www.centralbank.ie. Archived from the original (PDF) on 2019-02-07. Retrieved 2019-02-05. Cite uses generic title (help)
  16. "What the ECB wants". Solvency II Wire. 2013-05-22. Retrieved 2020-07-04.
  17. "Page Not Found (404) - Central Bank of Ireland" (PDF). www.centralbank.ie. Archived from the original (PDF) on 2019-02-07. Retrieved 2019-02-05. Cite uses generic title (help)
  18. http://www.bankofengland.co.uk/research/Pages/conferences/0115.aspx
  19. "Archived copy" (PDF). Archived from the original (PDF) on 2015-02-21. Retrieved 2015-02-21.CS1 maint: archived copy as title (link)
  20. http://www.bis.org/publ/bcbs239.pdf
  21. "Archived copy" (PDF). Archived from the original (PDF) on 2015-02-21. Retrieved 2015-02-21.CS1 maint: archived copy as title (link)
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