CREST

Question 1

How does CREST speed up the settlement of securities?

Answer 1

Allows for electronic transfer of ownership of shares, bonds and other securities with no physical paperwork

Question 2

What is the Delivery versus Payment (DVP) mechanism?

Answer 2

The simultaneous settlement of both cash and securities in a trade

Reduces risk of one party failing to deliver either the securities or the cash, minimizing counterparty risk

Question 3

What are dematerialized securities?

Answer 3

Where your ownership of shares is recorded electronically rather than on physical paper certificates

Means international investors can settle trades in UK without troubles of physical share certificates

Question 4

What are the benefits of a centralized record-keeping system?

Answer 4

Simplifies process of checking ownership

Reduces risks associated with physical movement of securities

Question 5

How does CREST facilitate corporate action?

Answer 5

Provides services that facilitate direct communication between issuers and their investors

e.g. - vote electronically, administer correct dividend payments

Question 6

What 4 functions would EQ use CREST for?

Answer 6

Share registrar admin
Electronic transfers
Dividend Payments
Corporate actions