Custody in Europe: a gateway to new efficiencies

How firms should approach custody model choice across Europe’s fragmented post-trade landscape.

In Partnership with

Europe’s custody landscape remains highly fragmented, with 41 CSDs across 36 countries still shaping access, cost and operating design. Developed in partnership with BNP Paribas, this report compares the three main custody access models and examines how each affects cost, complexity and control.

Europe remains fragmented

Market structure

Europe’s post-trade structure remains highly fragmented, with national infrastructures and legal regimes still shaping how the market operates.

This creates operational friction, weakens integration and increases the complexity of cross-border settlement.

Credit lines carry cost

Capital

Under Basel III, even unused liquidity capacity is no longer free.

The 5% NSFR treatment on undrawn intraday credit lines is creating a measurable capital drag for tier-one firms.

Fewer fails lower penalties

Efficiency

Settlement efficiency has a direct economic value when penalty exposure is reduced.

Agent-bank intervention that cuts fail rates by 20% can generate around 0.2 basis points in daily CSDR savings.

Legacy still absorbs budget

Legacy

Legacy remains one of the biggest constraints on change across securities services.

Large parts of the operating environment are still shaped by older systems, fragmented workflows and data constraints.

Data blocks automation

Data

Automation is still being slowed less by ambition than by weak data foundations.

Data quality and workflow inefficiency continue to limit how far firms can modernise at scale.

Readiness gaps remain

T+1

T+1 is exposing where technology readiness is still lagging behind market deadlines.

Earlier technology engagement is becoming increasingly important as settlement cycles compress.

Custody model choice in Europe is about more than market access. In a region that still spans 41 CSDs across 36 countries, firms need to assess how access structure affects cost, resilience and long-term operating efficiency.

How should firms approach custody model choice across Europe? What trade-offs emerge between agent bank, investor CSD and ICSD models as post-trade pressures continue to evolve?

The report compares the three main access models and examines how each one affects cost, complexity and control across Europe’s fragmented post-trade landscape. It looks at where settlement inefficiency, capital drag and tax complexity still create friction, and what firms need to consider as T+1, digital assets and regulatory change reshape market infrastructure.

The research, developed in partnership with BNP Paribas, highlights:

How the three main custody models differ in practice: Agent Bank, Investor CSD and ICSD structures each create different trade-offs across access, control and resilience

Where fragmentation still creates friction: settlement inefficiency, capital drag and tax complexity continue to shape the total cost of regional custody

Why total cost of ownership matters: model choice affects not only direct cost, but also the wider operating structure behind regional access

What future market change means for custody strategy: firms need to assess how T+1, digital assets and regulatory developments may alter model suitability over time

Why custody architecture is becoming more strategic: for firms reassessing regional access, operating model choice is increasingly tied to efficiency, resilience and long-term post-trade design