Crest, the UK-based electronic book entry platform, has moved to cut cross-border equity settlement charges by 12 per cent. The utility has also set a late November launch date for the introduction of delivery-versus-payment in securities settlement.
The reduction in tariffs was announced as Crest reported a 27% rise in gross revenues for the year ending 31 December 2000, to £87 million. Pre-tax profits rose by 15% to £32 million.
Crest says the tariff cuts will benefit users of both virt-x which goes live on 25 June 2001, and the London Stock Exchange’s International Retail Service (IRS) when trading commences on 30 April 2001.
Despite the cuts, cross-border settlement fees remain high, standing at £17.75 pounds for a deal involving a stock from France, Italy and seven other European countries. This is in contrast to a maximum £0.55 pounds charge for UK stocks.
Settlement of all IRS securities between Crest members will be available at Crest’s low domestic tariffs. At the outset there will be 111 stocks on IRS from ten different countries, including such household names as Daimler Chrysler, Cisco Systems, Nokia, Microsoft and Nestlé.
In addition, with effect from 26 November 2001, Crest will link with the Bank of England’s wholesale inter-bank payments system (RTGS) to permit settlement in central bank money. Once the link is live, inter-bank payments arising from transactions in Crest will be immediately discharged in real-time through RTGS, significantly reducing the risk of settlement default.