“We have recently received a letter from our Registrars, Capita, concerning the move by Euroclear (formerly CRESTCo) towards a single harmonised settlement system across Europe.
The upshot of this is that Capita have to undertake a system rebuild that will allow securities to continue to settle under this new regime and as a result they are seeking a contribution from all CREST clients towards their development costs.
The contribution is based on the number of CREST accounts held on our register. We currently have 1264 Crest accounts and our estimated charge for this year is £2400. Capita have also advised us that a similar cost will probably be charged next year.
Please can you let us know if other registrars are doing the same and if so what are their charges? What is the general view about having to pay this?”
We have received a similar letter from Capita. I believe the charges are unacceptable and not in line with our contract with Capita. I have advised Capita that we are not prepared to pay the requested costs as they are not covered by our contract and are of an inappropriate nature to simply pass on to a client. Capita have tried to contact me to discuss the matter but, as yet, we have not spoken. We are due to review our registrars in a few months and this is a matter I am sure will arise.
On the whole I am very disappointed with Capita’s handling of this matter.
We are a client of Capita and have received this letter. I have been considering how to proceed. The method of approach is rather unhelpful. I propose to write a letter in the first instance asking them to justify making a charge which is outside the contract.
I am glad this has been raised as I was going to discuss it at the next meeting. Capita are our registrars and we have received such a letter (long and rambling but eventually gets to the point that they want to charge a “contribution” – maybe the reader is meant to get bored before the end and not focus on the sting in the tail). IMHO this is bare-faced cheek and a complete try-on. As other contributors have stated, these are development costs that they should absorb. They have agreed to provide a service for a fee and should honour that agreement. Of course, when in accordance with their contract they are entitled to renegotiate fees or a charging structure then that is OK, and inevitably these extra costs will be recouped. But this should be done by mutual agreement and an attempt to impose a surcharge unilaterally is heavy-handed and unacceptable.
Sorry if this is a bit of a rant, but a couple of other things:-
1. Look closely at your next Capita bill – some of the items that they have charged my company for as “disbursements” or “expenses” are not true third party costs incurred but recharges from other internal profit centres like IT.
2. The share schemes part of Capita (i.e. Capita Share Plan Services – not the registrars as such) recently tried unilaterally to increase their annual administration fee for our SIP, simply because they wanted to recover more profit, and contrary to our agreement with them. It took a year of saying “no” before they dropped it but eventually they did.
So I will be refusing to pay Capita’s “contribution” and would suggest that others should do likewise.
Our registrars (Equiniti) have not made an equivalent request and we are on a fixed price deal.
Our response would always be the same – there are some costs of doing business that you have to bear yourself and cannot exlicitly recover from your customers. If employers’ NICs rose, we would not expect to be asked to contribute and this is just another overhead the supplier must bear.
Our registrars (Equiniti) have not yet approached us with any such request. Whilst any change to current charging arrangement would be resisted, I suspect that such costs will eventually find their way into the fee.
We’ve had the same letter from Capita. I can’t say I’m surprised that a low cost service (in a market where others have thrown in the towel and where high standards of accuracy and compliance are expected) needs to increase prices when forced into new systems by Europe. I just plan to check we have the best deal we can get by benchmarking against the competition later in the year.
We are not a client of Capita Registrars and have not received any approach from our registrar on this issue. I am aware that other companies secretaries have had discussions with their Registrars but this has not been raised at this stage with us.
The main company I act as Secretary for has de-listed but if I had been asked for a similar contribution, I would have refused to pay – it is the registrar’s responsibility to ensure it has the proper systems in place to provide its services to clients. Unfortunately, all registrars seem to have a habit of charging for everything they think they can get away with. One of my other companies is considering a listing on PLUS – I shall bear this situation in mind when I review the contract from the registrar.
We are also a client of Capita but so far I have not received such a request. In any case such a request would be vigorously disputed.
There seems to be an increasing trend from Registrars to suggest that any change or tweak to a system to accomodate new laws or regulation has to be paid for by their clients. We do not use Capita Registrars but since the implementation of the new Companies Act Registrars seem to have great desire to seek to reclaim any development work they need to carry out to enable them to carry on their business as registrars directly from their clients rather than as any other company would do in ensuring that they are budgetting to renew and develope their systems to stay in the game.
I have been approached by our own Registrar to help recoup their cost of investment in various technical updates and have rejected their requests as we have a contract which states that they will provide a fit for purpose service and they agreed to a set rate to provide that service.
I will be looking our for a request now that this has been raised!
Kind regards
Victoria