CRESTCo announced that a further GBP 10 million of savings will be delivered to clients from a new round of net tariff reductions, effective May 1, 2006.
Specifically, CRESTCo will decrease its fee by more than 60%, from 25p to 9p, to process an electronic order-book transaction before netting and redefine the entire volume-discount structure and introduce a new, high-volume 90% discount band, which will reduce the cost of processing a gross transaction to as little as 1p.
This new structure aims to better reflect the genuine cost savings generated by increased client use of the CREST system and reduce the annual member-account charge to GBP 1 for all member accounts, irrespective of volumes (compared with today’s practice of charging GBP 5 for each member account, which falls to GBP 1 after 5,000 accounts).
It plans to increase its tariff for corporate-action processing by about GBP 1 million to cover CRESTCo’s costs to offer this service. CRESTCo implemented earlier in 2005 an additional range of tariff reductions totalling GBP 11 million.
Tim May, chief executive of CRESTCo, said, “These new tariff reductions and restructured volume-discount thresholds will enable our clients to grow their business with even lower post-trade processing costs. As SETS trading volumes continue to rise on the London Stock Exchange, and as algorithmic trading and Direct Market Access increases, CRESTCo’s wholesale, custodian and retail clients will be able to reduce their marginal post-trade costs.”