CREST Depositary Interest

CREST ['the CREST system'] is a UK-based central securities depository that holds UK equities and UK gilts, as well as Irish equities and other international securities.

It was named after its securities settlement system, CREST, and has been owned and operated by Euroclear since 2002. The name CREST is not an acronym. There have been attempts to devise backronym for what CREST could mean such as "Certificateless Registry for Electronic Share Transfer", and then there are some pranksters in the UK Money Markets who use phrases such as "Could Reasonably Expect Settlement Today" and "Can't Remember Ever Sanctioning Taurus".

CREST allows shareholders and bondholders to hold assets in a dematerialised, i.e. electronic form, rather than holding physical share certificates. CREST also serves a number of other important functions, such as assisting in the payments of dividends to shareholders.

It is also an "electronic trade confirmation system" ("ETC") (using Trax). When parties to a transaction make a deal, they both electronically confirm their sides of the transaction via electronic transfer. Both parties are required to submit confirmation details to Crest. In the event that transaction details do not match, CREST will highlight the issues and ensure that the problems are resolved as soon as is practicable.

Stamp duty in the United Kingdom is only payable on physical share certificates therefore no stamp duty is payable on shares settled via CREST, however to compensate for this the UK government added a stamp duty reserve tax which is collected by CREST on behalf of Her Majesty's Revenue and Customs.

The project was launched in 1993, following the Taurus fiasco, and the operating company CrestCo was founded in 1996. CREST was acquired by Euroclear in August 2002.

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