CrestCo to claim problems have been ironed out

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The Independent Online
The managers of Crest, the City's troubled new automated share settlement system, will make a stout defence today against calls by the system's users that Crest's full implementation should be delayed while glitches are ironed out.

The board of CrestCo, the company which funds Crest and represents the brokers which use it, meets today to decide whether the old paper-based system should be kept running in parallel with the new one until the latter works properly. The Crest system has had problems handling large dealing volumes.

Geoffrey Turner, chief executive of the Association of Private Client Investment Managers and Stock Brokers, repeated his call last week for a delay in closing down Talisman, the current settlement system, for another six months after the April handover deadline. The hefty cost of running the two systems at the same time should be paid by the market, Mr Turner said.

But Paul Symons, manager of Crest, said "great improvements" had been made since the "dark days of October".

"That's our belief. The board must sit down and see if the improvements are adequate," Mr Symons said. He cited statistics which showed that 75 per cent of deals were being handled within two minutes, compared with 25 per cent around three weeks ago.

Alarm bells have been ringing in the City over the past few weeks because of teething problems with Crest. This has prompted speculation that the CrestCo board could suspend new shares being listed on the system or at least delay the decommissioning of Talisman in April.

However, David Jones, chief executive of phone share-dealing company ShareLink and a member of the CrestCo board, indicated he would resist any calls for further delays to Crest.

"At the moment it should proceed as planned. It would be premature [to make delays] for the next month or so," Mr Jones said.

There have been delays in transferring money to stock broking firms' accounts, which could raise capital adequacy problems. This has prompted the Securities and Futures Authority (SFA), the City regulator, to make visits to City firms.