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Thomas Murray’s Central Securities Depository Risk Assessments are a key component of its Market Information Guides. They combine detailed factual information about the structure and operations of all planned and operational Central Securities Depositories (CSDs) with Thomas Murray's assessment of their capabilities against six categories of risk, plus an overall risk rating, on the familiar AAA to C rating scale. Ratings of 147 CSDs are available and updated daily.
The design, ownership and structure of a CSD has a major impact on the asset safety of investments held in domestic markets. The Depository Risk Assessments address both commercial and regulatory issues, including SEC Rule 17f-7 (US) and FSA COB rules (UK), in order to allow users to identify potential risk exposures suffered by assets owners. Their scope covers settlement and custody risks linked to equity and fixed income transactions processed in local markets.
The information in each Central Securities Depository Risk Assessment is based around a number of standard headings, including:
- The ownership structure and allocated role of the depository in its market, including the financial instruments it supports
- Asset commitment risk: the period of time from when control of securities or cash is given up until receipt of countervalue
- Liquidity risk: the risk that insufficient securities and/or funds are available to meet commitments
- Counterparty risk: the risk that a counterparty will not settle its obligations for full value at any time
- Asset servicing risk: the risk that a participant may incur a loss arising from missed or inaccurate information provided by the depository, or from incorrectly executed instructions in respect of corporate actions and proxy voting
- Financial risk: the ability of the CSD to act as a financially viable company
- Operational risk: the risk that deficiencies in information systems or internal controls, human errors or management failures will result in losses
- CSD on CSD risk: the credit risk that a CSD takes when providing a service to a foreign CSD, or when using a foreign CSD as a local service provider
- The CSD's governance and regulation
- Internal safety measures implemented by the CSD
Each CSD is invited to update information held on it directly in Thomas Murray's database on a rolling basis, and all submitted amendments are vetted by Thomas Murray's team of analysts before being published. The assessments are also kept updated by Thomas Murray analysts on the basis of confirmed news items affecting local markets, with each change requiring confirmation from at least two independent sources. Notifications of changes in risks that might affect the ratings are e-mailed to subscribers daily, along with an assessment of their impact on the risk exposures of investors.
Daily newsflashes are included in the price of a subscription. If you are interested in seeing sample newsflashes, read the archive of past updates or sign up to receive our monthly Newsletters.
If you would like to purchase this service, or find out more about it, please contact:
Derek Duggan at dduggan@thomasmurray.com or telephone him on +44 (0) 20 8600 2300
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A free trial of Thomas Murray’s Market Information Guides enables access to the full suite of Thomas Murray Ratings & Information products for 2 markets:
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