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Unmasking Global Wealth: Why End Investor Transparency in Securities is the Next Big Thing

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Lena Kashyap in Business & Economy May 2025 • 4 min read.

"Dive into the growing movement for transparency in global finance and how it could reshape markets and regulations."


The widening gap between the rich and the rest has sparked a global conversation about wealth inequality. This rising concern has led to some radical proposals, including the creation of a central database – a "global financial register" – that tracks the ownership of financial assets worldwide. Imagine a single source revealing who owns what, from stocks to bonds, across the entire planet.

Economists Thomas Piketty and Gabriel Zucman have championed this idea, suggesting that the register could be built using the existing databases of major Western central securities depositories (CSDs). These are the institutions that hold and manage vast quantities of securities, like DTC in the U.S., Euroclear, and Clearstream in Europe. But here’s the rub: most CSDs in developed nations operate under a system of "street name" registration or "omnibus" accounts. In plain terms, they don’t identify the actual, end investors who own the securities.

This article explores the feasibility and implications of achieving end investor transparency within CSDs. What are the arguments for and against knowing who ultimately owns the world's financial assets? How would it impact corporate governance, tax collection, and the fight against financial crime? And, is it even technically and politically possible to pull off such a monumental shift?

The Case for Transparency: Beyond Market Efficiency

Transparent skyscraper filled with data streams, financial transparency

The current CSD model evolved for practical reasons, primarily the complexity of the financial intermediation chain, the rise of cross-border securities investments, and regulatory differences between countries. Banks and securities firms act as intermediaries between the CSDs and the end investors, adding layers of separation and making it difficult to see who the real owners are. However, this opacity clashes with a growing demand for greater transparency, driven by concerns about fairness, accountability, and the integrity of the financial system.

While most large Western CSDs rely on omnibus accounts, transparent CSDs already exist in some smaller Western economies and several large emerging markets. These examples demonstrate that it's possible to build systems where the end investor is known. Such transparency could unlock significant benefits:

  • Enhanced Corporate Governance: Direct communication between companies and their shareholders becomes easier, potentially leading to more engaged and responsible corporate behavior.
  • Combating Financial Crime: Greater transparency makes it harder to hide illicit funds, strengthening efforts to combat money laundering, tax evasion, and sanctions violations.
  • Improved Tax Collection: Governments can more effectively track and collect taxes on investment income and wealth.
  • Greater Market Stability: A clearer understanding of who owns what can help regulators identify and manage systemic risks within the financial system.
The push for transparency isn't unique to the securities industry. In other sectors, like banking, strict secrecy is being eroded by international agreements like the U.S. Foreign Account Tax Compliance Act (FATCA) and OECD initiatives on the automatic exchange of bank information. These initiatives reflect a growing consensus that transparency is essential for tackling global challenges and promoting a fairer financial system.

A Powerful Wave

The drive for transparency in financial markets is a powerful wave, fueled by public demand for greater fairness and accountability. While challenges remain, end investor transparency in securities depositories is a goal worth pursuing. By embracing innovation and adapting regulatory frameworks, we can create a more open, equitable, and resilient global financial system. This shift promises not only to benefit corporations and investors, but also to fortify the bulwarks against illicit activities, setting a new standard for integrity in the financial world.

Everything You Need To Know

1

What exactly is end investor transparency in securities depositories?

End investor transparency in securities depositories refers to a system where the actual, or end, investors who own securities are identified, rather than using 'street name' registration or 'omnibus' accounts. This is a shift from the current system used by many major Western central securities depositories (CSDs) like DTC in the U.S., Euroclear and Clearstream in Europe, where the CSDs do not identify the ultimate owners of the securities.

2

Why is the current system, where end investors are not always identified, in place?

The current CSD model, which often uses omnibus accounts, was developed to manage the complexity of the financial intermediation chain, handle cross-border securities investments, and deal with regulatory differences between countries. Banks and securities firms act as intermediaries, creating layers of separation between the CSDs and the end investors. The lack of transparency is increasingly seen as a problem due to concerns about fairness, accountability, and financial system integrity.

3

What are the potential benefits of achieving end investor transparency?

End investor transparency could make it easier for companies to communicate directly with their shareholders, potentially leading to more engaged and responsible corporate behavior. It would also make it harder to hide illicit funds, thus strengthening efforts to combat money laundering, tax evasion, and sanctions violations. Governments could more effectively track and collect taxes, and regulators would have a clearer understanding of systemic risks within the financial system. Transparent CSDs already exist in some smaller Western economies and several large emerging markets, proving feasibility.

4

Are there other efforts to increase transparency in the financial system?

FATCA, or the U.S. Foreign Account Tax Compliance Act, and OECD initiatives on the automatic exchange of bank information are examples of efforts to increase transparency in other sectors, like banking. These international agreements reflect a growing consensus that transparency is essential for tackling global challenges and promoting a fairer financial system. They share a common goal of reducing financial opacity but focus on banking information rather than securities ownership.

5

What is the 'global financial register' concept, and who proposed it?

Economists Thomas Piketty and Gabriel Zucman have proposed creating a 'global financial register' that would track the ownership of financial assets worldwide. This register could potentially be built using the existing databases of major Western central securities depositories (CSDs). The idea is to create a single, comprehensive source of information revealing who owns financial assets across the globe, from stocks to bonds. However, the proposal doesn't address the technical and political challenges of implementing such a system.

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