Transparent skyscraper filled with data streams, financial transparency

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

Lena Kashyap in Business & Economy August 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.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.1093/jfr/fjy003, Alternate LINK

Title: Towards A Global Financial Register? The Case For End Investor Transparency In Central Securities Depositories

Subject: Finance

Journal: Journal of Financial Regulation

Publisher: Oxford University Press (OUP)

Authors: Delphine Nougayrède

Published: 2018-08-06

Everything You Need To Know

What are central securities depositories (CSDs), and why are they relevant to discussions about wealth inequality?

Central securities depositories (CSDs) like DTC in the U.S., Euroclear, and Clearstream in Europe, are institutions that hold and manage vast quantities of securities. They are relevant because economists like Thomas Piketty and Gabriel Zucman have proposed using their existing databases to create a 'global financial register' that tracks the ownership of financial assets worldwide. The challenge is that many CSDs in developed nations operate under 'street name' registration or 'omnibus' accounts, obscuring the identities of the actual end investors.

What is end investor transparency, and what benefits could it bring to corporate governance?

End investor transparency refers to the practice of ensuring that the true, ultimate owners of securities are identifiable within central securities depositories (CSDs). This contrasts with the current system in many large Western CSDs that use 'omnibus' accounts, which obscure the identity of end investors. End investor transparency could improve corporate governance by enabling direct communication between companies and their shareholders, potentially leading to more engaged and responsible corporate behavior. However, the existing system evolved because of the complexity of the financial intermediation chain, the rise of cross-border securities investments, and regulatory differences between countries. Overcoming these challenges is essential for realizing the potential benefits.

How could end investor transparency in securities depositories help in combating financial crime?

End investor transparency in securities depositories could significantly hinder financial crime by making it more difficult to hide illicit funds. With a clearer understanding of who owns which assets, it becomes easier to detect and prevent money laundering, tax evasion, and sanctions violations. The current system, which often uses 'omnibus' accounts in central securities depositories (CSDs), creates opacity that criminals can exploit. However, implementing such transparency requires overcoming technical and political challenges, including adapting regulatory frameworks and addressing concerns about data privacy.

Beyond the securities industry, are there other sectors where financial transparency is increasing, and what implications does this have?

Yes, transparency is increasing in other sectors, notably banking, where strict secrecy is being eroded by international agreements such as the U.S. Foreign Account Tax Compliance Act (FATCA) and OECD initiatives on the automatic exchange of bank information. These initiatives reflect a broader global consensus that transparency is essential for tackling global challenges and promoting a fairer financial system. The implications are that the push for end investor transparency in securities depositories, facilitated by central securities depositories (CSDs), is part of a larger trend towards greater accountability and openness in financial markets worldwide.

What are the primary obstacles to achieving end investor transparency in global securities markets?

The main obstacles include the complexity of the existing financial intermediation chain, the prevalence of cross-border securities investments, and regulatory differences between countries. Many large Western central securities depositories (CSDs) rely on 'omnibus' accounts, which obscure the identity of end investors. Banks and securities firms act as intermediaries between the CSDs and the end investors, adding layers of separation. Overcoming these obstacles requires significant technological and regulatory adaptations. Additionally, there are political considerations, such as concerns about data privacy and the potential impact on investment flows, that must be addressed to achieve widespread end investor transparency.