Iain Saville, chief executive of the CREST settlement system, has resigned. He is joining Computershare, the Australian-based share registration business now looking to turn the raw data from its transfer agency business into information and analytic products. Saville joins the main board of Computershare as Managing Director for Europe, where the firm has major plans in hand. Last month the company announced a joint venture with Deutsche Borse, in which Computershare GmbH will take over Deutsche Borse’s IAB share registration business, which currently serves around half the German market. “I am absolutely delighted to be joining Computershare at this exciting stage in its development, where enormous opportunities exist for Computershare’s world leading abilities in registry, share scheme operations and advanced trading systems,” says Saville in a prepared statement. “Computershare has the global reach, and the technology, to provide the sophisticated processing needed to support the world’s global companies. I look forward enormously to helping the further development of this successful business.” But is this just a normal case of a bored, fifty-something executive looking for a new challenge and better rewards at a fast-growing company in an adjacent business?
Probably not. In fact, many will find the European dimension of Saville’s new job richly ironic, for no one could accuse the former CREST CEO of being communautaire. Saville has savaged the plans for consolidation of European CSDs and ICSDs for lacking both commercial and financial justification. He memorably accused the Deutsche Borse of casting “planning blight” across the London market through its on-off flirtation with the London Stock Exchange, an organisation whose leadership in recent years left him somewhat underwhelmed. But the former CREST CEO is no unthinking Europhobe. He was the first to draw attention to the fact that mergers of CSDs and ICSDs are not undesirable because they are European but because they are hard and expensive to pull off, fail to deliver the advertised benefits, ignore quick-and-dirty alternatives, rest on dubious claims about the true nature of a CSD and misleading claims about the cost of technology, and make little or no economic sense for market participants. In a just world – especially one which made allowances for what was once described as his “delightful thuggery” – Saville would have won the argument long ago. Certainly the recently published Centre for European Policy Studies report, which has infuriated the main advocates of a single European CSD (namely, Euroclear and the DTCC) by at last deflating what was once the conventional wisdom on this score, is a document which Iain Saville can legitimately claim to have inspired. Nor is the triumph a purely intellectual one: Iain Saville proved it was possible to build a world-class CSD for less than 30 million, on time and under budget, in an era when the case for consolidation of CSDs rests in large part on a supposed need to avoid duplication of investment. His focus on building links between CSDs and ICSDs, most evident in The Settlement Network partnership with SIS Sega Intersettle in Switzerland, is often written off as a last echo of the late 1990s plan by the European CSDs Association (ECSDA) he once chaired to link CSDs and harmonise their procedures. But it remains a cheap and practical alternative to the grandiose Euro-visions in which the ICSDs in particular tended to dress up naked self-interest, but which has until now dominated discussion over what ought to happen. Al the more reason to regret the resignation of Iain Saville just as the infrastructural consolidation debate has just started to heat up again. Saville is a man whose keen intellect (there are not many mathematical physicists working in securities services) and boundless self-confidence will be sorely missed over the coming months.
Indeed, there is already speculation that his departure presages a Eurocratic turn in policy at CREST, which many have predicted ever since Sir Nigel Wicks replaced Scott Dobbie as chairman in May last year. A former UK Treasury official, Wicks is steeped in the longstanding Europhilia of the British civil service establishment. More importantly, as a member of the “Committee of Wise Men” appointed by the European Council to recommend reforms of securities regulation in Europe, he was party to a report which set out to explore constitutional obstacles to the implementation of the Financial Services Action Plan laid down by the European Commission to accelerate the development of a single European capital market. The chief characteristic of the report was its impatience with the legislative procedures of the European political system. Consequently, it focused on national regulatory initiatives as a means of forcing the pace of consolidation of the European market infrastructure without the need for elected politicians to issue and agree of Directives, amend treaties and push legislation through national parliaments. Unsurprisingly, the report was not well received by the European Parliament – but was a characteristic product of the clerisy which is shaping the future direction of Europe in this field, as in others. Certainly, securities services Kremlinologists ought to pore over the carefully worded valedictory address of Sir Nigel Wicks. “Iain has been CREST’s leader for the last eight years, during which period he has presided over the development of a world-leading settlement infrastructure based in London,” he said. “He has also been a major force in stimulating open debate on the future structure of European markets. CRESTCo will miss him greatly, and I will be very sorry to lose his wise counsel and his wide experience. But he has now decided to move on to new challenges at Computershare. The Board thank him, and wish him every success.”
At CREST, where life without Iain Saville must seem inconceivable to members of an organisation which he has dominated since Bank of England took charge of UK securities settlement in the wake of the TAURUS debacle in 1993, Hugh Simpson has agreed to act as temporary chief executive while the Board hunts for a permanent successor both inside and outside the organisation. The CREST Board is portraying the departure of Saville as a logical step, following the successful introduction of a central counter party (CCP) for the London Stock Exchange in conjunction with the London Clearing House (LCH); the addition of payment in central bank money; and the successful installation of additional processing capacity. But it is not as if CREST is running out of challenges, both minor (such as proxy voting) and major (such as European CSD consolidation). Saville dutifully told the London Evening Standard that there has been absolutely no falling out with the chairman: “I have been here eight years, I am 53 and if I was going to move this was the time to do it.” Sometimes things are exactly what people say they are, but this does not feel like one of those times.
However, the peculiarly precise and high-minded character brought to CREST by the Bank of England alumnae who created it, will not disappear with Saville. Hugh Simpson has known CREST as long as his predecessor, having been part of the original Bank of England team formed to create the CSD back in August 1993. He joined the Board in 1999. CREST also announced that David Wyatt, development director, has joined the Board as an executive director. He too was a former member of the Bank of England supervision department who left to help set up the newly formed CREST in 1993. And Hugh Simpson’s farewell adopted a different tone to that of his chairman: “Iain has provided inspirational leadership and vision to CREST and the financial markets over the last eight years. He has built CREST into the world’s leading real-time settlement system. In taking over I can confirm that Iain’s vision will continue; we remain committed to delivering continued value to our international customers and leading the debate on the future of European financial infrastructure.”
For Computershare, meanwhile, Saville is an impressive catch. It is a big job – Saville will be responsible for all of Computershare’s European businesses, and report directly to group CEO Chris Morris – but even so there will be those who wonder if it is big enough. Certainly, Computershare CEO Chris Morris seems almost unable to believe his luck. “I am delighted that Iain has agreed to take up this position,” he says. “His appointment is part of a planned and considered effort to strengthen our direction in Europe and marks the next stage in the development of Computershare’s global strategy. The company now has a dominant position in providing technically advanced shareholder services in all major English-speaking markets. Iain will take the business into Europe, where the opportunities for the development of shareholder businesses are immense. Iain has vast experience of the UK market. His distinguished career at the Bank of England, and then as Chief Executive of CRESTCo Ltd and Chairman of ECSDA, gives him an in-depth knowledge of the world securities markets, and of technology to support the high volume processing of securities. With his outstanding track record and market relationships, he is ideally placed to help realise Computershare’s strategies. His place on the expanded board will both complement existing strengths and bring valuable expertise to aid our global expansion.”