CREST

Crest is the computerised system for tidying up or 'settling' purchases and sales of shares. It came into effect in July 1996 and has replaced the old paper-based process of settling share deals, known as the 'Talisman' system. This relied on pieces of paper, including share certificates, being passed between investors, brokers and marketmakers.

As a private investor, if you prefer to buy and sell shares with your certificates, you will be able to go on doing so - although it's likely you'll pay more for this than dealing electronically through Crest.

There are two ways for the private investors to be involved in Crest.

• Directly - as a direct participant in the Crest system. This will mean your shares are registered in your name and you will enjoy all the benefits of ownership, as now. In short you'll be dealing with the company you invest in 'directly'. CRESTCo will charge the sponsor for this service, however your broker may add a service charge of his own, so shop around!
• Indirectly - you can hold your shares through a nominee account which is administered by your broker. If you decide to go the nominee route, your broker will accumulate all your shareholdings and those of other investors in a nominee company.

Crest is appealing to all but the luddites among us. It should enable greater efficiency and lower operational costs for stockbrokers which in turn ought to be passed on to private investors.

And share settlement is now much quicker. This settlement process now only takes three days and could possibly become instantaneous in the future.

Years after 'Big Bang', which revolutionised how share dealing is performed, Crest is revolutionising how share deals are settled. It some ways it's an even 'Bigger Bang' - its introduction heralding another shake up in the way the City works - order matching. Unit trusts and shares in OEICs can also be settled in CREST.

Crest is operated by a private company CRESTCo. Effective July 1st 2007, CRESTCo Ltd. changed its legal and operating name to Euroclear UK & Ireland Limited - having been part of the Euroclear group, the world's largest settlement system for domestic and international securities transactions, since September 2002.

Its address is:

33 Cannon Street, London EC4M 5SB.

Telephone: 0207 8490000 (General Enquiries)

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Last Updated: June 2007 © Moneyextra.com

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