What are the advantages of CREST personal membership?

 

Most trades on the UK and Irish markets today are recorded and settled through CREST. For most investors, shares will be held in a nominee account, which means that they are recorded on CREST in the name of the nominee company that your stock broker uses to hold investments on behalf of its clients.

You will only be the direct owner and appear on the register of shareholders if you have a personal CREST account. Holding shares ‘in nominee’ is normal industry practice for cost and efficiency reasons and is not usually a huge disadvantage for the investor. However, there are a few benefits to having CREST personal membership that make it worth considering if your stock broker offers sponsored CREST accounts at a reasonable cost.

Since your name will be on the register of shareholders, you will receive reports and other corporate mailings directly and you will be able to attend and vote at annual general meetings.This does not automatically happen if you hold shares in a nominee account.

Opting for CREST membership is not the only way of getting reports and access to meetings – your stock broker can pass these on to you even if you hold shares in a nominee account. However, they may charge you for doing so.

In addition, you will receive notifications of corporate actions directly and can handle them yourself, rather than needing to pass your instructions to your broker. You will also receive your dividends directly and can arrange for them to be paid into any nominated bank account, rather than via your broker.

You will also be able to make use of any special deals or perks for shareholders that the company offers. These are usually of little value today, but there are a few exceptions.

Next: How do you open a personal CREST account?