City wants Crest delay

Software problems and a lack of confidence have provoked City banks to call for a suspension of the transfer of UK stocks to the Crest share settlement system.

As Computing went to press, officials from leading banks and securities houses were believed to be meeting directors of CrestCo, the firm which owns the system. Leading City IT directors want to slow down the transition, which is only 25% complete.

One source feared that the tight timetable for transferring to Crest could result in a 'loss of systemic control' over UK stock settlement.

In public, the tone is more moderate. John Waters, head of IT at stockbroker Capel Cure Myers, said: 'No-one is suggesting that CrestCo is at fault, but there are fears that control and reconciliation processes have not been fully sorted out.'

Software bugs have already resulted in some delays. Problems with the system's file transfer enquiry database and the interactive input enquiry function shut the system down last Tuesday for two hours.

CrestCo chief executive Iain Saville apologised to the market for continued problems with the system.

According to Waters, many firms were keen to see a delay of three months, so they could 'take stock' of the situation.

The IT director of another bank said institutions needed more time to become familiar with the new electronic system. 'We have not had time to become confident with the new technology, and this is creating problems for us,' he said.

A CrestCo spokesman said the company was treating the situation 'very seriously'.

'We are considering three possibilities,' he said. 'We either do nothing and continue as before, or we agree to a three-month delay.

'Alternatively, we could try moving some of the high-volume stocks. Our favoured position would, obviously, be to stay on course.'