City Consultants Limited (CCL) says it has developed a model that can quickly assess whether firms are paying too much for clearing and settling UK cash equities and gilts. Using its new External Charges Model (ECM), says the firm, CCL has already identified potential savings of 2.4 million per annum for several firms.
The ECM works by assessing how CREST participants use the 300 plus messages that CREST provides to support their businesses. It quantifies the costs, including network supply, of each operation. It also evaluates the minimum number of messages that are required, therefore identifying where cost savings can be made.
Using the tool, CCL has assessed the messaging profile of a number of firms, identifying an average saving of 144,000 per firm. The payback period for the expenditure is on average far less than one month’s savings.
Caroline Lee of CCL said, “In the present climate firms cannot afford to be wasting money on functions that do not support their core business. CCL has developed the ECM model to help its customers quickly identify where they can make potential savings.
“The ECM model also provides a quick and easy way of repeating the checks on a regular basis as business changes, including answering the question of whether or not to use settlement netting.”
CCL is happy to perform a free health check for any CREST participant to come up with a headline figure for potential savings per annum.