Progress in technology has driven the development of centralised and computerised book entry systems for custody, as well as improve the efficiency and effectiveness of the clearing and settlement system. These developments have contributed significantly to the integrity of the markets and served to reduce risk and costs.

However, the legal framework of many countries is still based on concepts of physical securities, and settlement based on delivery of physical share certificates, where ownership rights are defined as traceable property rights in individual securities and evidenced by the registration of the physical share certificate in the name of the individual owner. These concepts are not in keeping with modern day practices, where automated clearing and settlement systems have been developed and the establishment of central securities depositories now provide the means for holding securities in either immobilised or completely dematerialised form and permit the transfer of these holdings through book-entry. These new developments have made some existing laws obsolete as they fail to adequately support the operations of a modern central depository system (CDS).

Seven emerging market countries have provided reports on their clearing and settlement systems. The reports show some similarities in the general approach to the operations of the clearing and settlement systems in the countries. However, there are also some marked differences in the methodology and approach to regulation.