Introduction

In England, an investor can hold securities in one of three principal ways. Firstly, she can hold the securities in her name in certificated form. In that case, her name is on the securities register; she receives a paper certificate and is considered to hold legal title to the securities.

Secondly, an investor can hold securities in her own name, but in uncertificated form. To be able to hold securities directly in uncertificated form, an investor needs to become a participant of CREST. There are two ways of participating in CREST – by becoming a user or by appointing a sponsor who is a user. The difference between the two is that users have a computer link with CREST. A user needs to acquire the hardware and software necessary to connect to the network. Participants who are not users do not have such a computer link, but access the system through a sponsor who has network access and acts in the name of the participant. The later form of participating in CREST is also referred to as ‘personal membership’. In both cases the investor's name appears on the securities register and the investor holds legal ownership to the securities.

Thirdly, an investor can opt to have the securities held by an intermediary on her behalf; in that case, the securities are held indirectly. The investor does not hold legal title to the securities and the name of the intermediary or a nominee company appears on the securities register.