Problems trading SKIP

[bruncher]

This has been discussed on the Broker board but no explanation so far

viewtopic.php?p=193349#p193349

The issue is that (Skipton Building Society) SKIP 11 7/8 PIB cannot be traded by Selftrade. They say the reason is that it is not settled in CREST.

Skipton SBSA 8.5 PIB however can be traded on Selftrade.

I would be grateful if someone could explain this.

Many thanks

[hiriskpaul]

Not sure what you are referring to here. Skipton have issued 2 PIBS, one paying 8.5%, the other 12.875%, both of which are available through CREST. I hold the 12.875% PIBS at Hargreaves Lansdown, who only offer CREST settled PIBS.

As far as I know all building society PIBS are available through CREST.

[hiriskpaul]

Just read the other topic and can see it is the 12.875% PIBS you are referring to. This is definitely held on CREST. It is a bigger issue than the 8.5% PIBS, so should be more liquid. No reason why Selftrade should not be able to offer this other than the "Computer says no" type of problem which I know can be a real pain with some brokers.

[bruncher]

Thanks hiriskpaul

I have written to Selftrade asking them to look into this.

[everhopeful]

As I have mentioned previously Barclays SmartInvestor does not allow trading in any PIBs or Retail Bonds despite both being available previously with Barclays Stockbrokers. I have been unable to get a sensible reason out of them.

[bruncher]

Thanks hiriskpaul

I have written to Selftrade asking them to look into this.

Selftrade have replied, adamant that

GB0008194119 does not settle through CREST

I am not an industry insider, so have nothing to contest their claim, other than "Lemonfools tell me a different story". If someone can provide evidence to refute Selftrade, I will persist with them. Is there an official list of CREST-settled bonds and shares?

[Holts]

I had the same from selftrade , they would not accept these when I was transferring from what was originally Harris Allday .

I spoke to Treasury at Skipton , who were not certain but thought it did as it was given an Isin number suggesting it had in part de materialised and been registered within crest , they referred me to link asset services who were absolutely useless , monkeys would be better trained , I lost the will to live speaking to them

thank you for reminding me so I can approach selftrade again .

[bruncher]

In this case, I don't think the problem is with Selftrade.

I have been in touch with a lot of people about this including LSE. Euroclear (who own CREST) tell me: " [SKIP] ... is not eligible for full electronic settlement. It is the choice of the Skipton to decide which [of their PIB's] are CREST eligible and to approach their registrar if they wish to change it."

The registrar has confirmed that the setup is the responsibility of Skipton. Skipton initially referred me to their registrar but I have taken the matter back to Skipton and will chase again soon. It isn't clear whether the situation is the way it is through deliberate design or by accident. I can't think of a reason why Skipton would want to make it difficult to trade SKIP. Are there advantages to illiquidity?

If there's an industry insider reading this who can throw further light on it, please do.

[GoSeigen]

In this case, I don't think the problem is with Selftrade.

I have been in touch with a lot of people about this including LSE. Euroclear (who own CREST) tell me: " [SKIP] ... is not eligible for full electronic settlement. It is the choice of the Skipton to decide which [of their PIB's] are CREST eligible and to approach their registrar if they wish to change it."

The registrar has confirmed that the setup is the responsibility of Skipton. Skipton initially referred me to their registrar but I have taken the matter back to Skipton and will chase again soon. It isn't clear whether the situation is the way it is through deliberate design or by accident. I can't think of a reason why Skipton would want to make it difficult to trade SKIP. Are there advantages to illiquidity?

If there's an industry insider reading this who can throw further light on it, please do.

Not an insider but I think the thrust of what bruncher is saying is right. Specifically, Skipton have an interest in having their securities traded as widely as possible so I'd have thought their IR people would support investors who are asking for help with this issue. Certainly bruncher seems to be onto a promising way to resolve it.


GS

[Holts]

I have written again to Skipton IR enquiring as to the possibility of resolving the Crest issue , will post any reply.

[Holts]

I am pleased to say after some correspondence with Skipton they have ensured these are Crest eligible , reply copied below.


Good afternoon,

I am pleased to advise that following your email below we have taken your enquiry up with Link Asset Services, the Registrar for the 12 7/8% PIBS and can confirm the securities are now CREST eligible.

Thank you for bringing this matter to our attention and for your interest shown in the Society.

Kind regards

[Holts]

They just contacted me again that will be from the 10th July .

[hiriskpaul]

I am bemused as to why I can trade SKIP easily at HL. I can even get online quotes. Buy 10k nominal at 203.25, sell at 200.943 (plus 154 days interest £547.72).

[Holts]

This was the initial response I had from Skipton Capital Markets


The 12 7/8 PIBS were originally issued in 1992 and therefore at that point were purely settled on a physical basis rather than via CREST. The original prospectus therefore makes no reference to CREST. However the PIBS now has an ISIN, GB0008194119, which suggests that the issuance has, at least in part, been de-materialised and registered within CREST. I am unable to confirm definitively however whether this is the case.

[bruncher]

They just contacted me again that will be from the 10th July .

I have had the same info today

I am pleased to advise that following your email below we have taken your enquiry up with Link Asset Services, the Registrar for the 12 7/8% PIBS and can confirm the securities are now CREST eligible.

Thank you for bringing this matter to our attention and for your interest shown in the Society.

Then I received a short follow up email confirming CREST-eligibility from 10th July rather than as of today.

Well, it feels like something was achieved.

[Holts]

So , have written to Selftrade now , who will no doubt go into denial .

[88V8]

So do we think the SKIP 12.875 (certainly available through ii) is currently a good idea?
I unloaded most of our Building Society instruments a while ago.

V8

[88V8]

So, we don't think it's a bad idea.

Bought some more today.
Online.
Wasn't going to buy any more Financials, but heyho.

V8

[Holts]

I was still holding from the depressed levels in the last financial meltdown the price had more than doubled and the income flows , where else to go ? Nothing stood out so stuck with them and some BSocs were still the conservative types .

Anyway for completion Selftrade have confirmed they will now accept certificates for electronic registration and you can trade them online .

[bruncher]

Bought some more today.
Online. V8

May I ask, which broker?