City still unprepared for Taurus

THE CITY is unprepared for Taurus, the Stock Exchange system for replacing share certificates with electronic records, according to a survey by Touche Ross, the accountants.

None of the 70 firms surveyed believed the stock market as a whole was well prepared for Taurus. But one-third said their own preparations were advanced.

The system, which has already been delayed several times, is due to be launched in the first half of next year.

Three quarters of the firms that took part believe the new system will be more efficient but 60 per cent believe it will increase costs of processing share deals.

Brian Ludlow, of Touche Ross, said: 'The Stock Exchange must take Taurus by the horns and urgently address the underlying problem of credibility which is adversely affecting every aspect of the City's preparations.'

The main Taurus test is due to begin in January. A spokeswoman for the Stock Exchange said yesterday that development of both the communications and security systems was on schedule even though there had been worries that the security system was running behind.

She said the Touche Ross survey was carried out in the summer before preliminary testing started. A number of firms, many of which hope to win business advising Stock Exchange firms on Taurus, are planning surveys.

The new system is designed to bring London into line with other financial centres, where much of the paperwork in share dealing has been removed. In place of share certificates, investors will receive statements, similar to bank statements, from either the companies in which they are shareholders or from their brokers.

Shortly after the launch of Taurus, the fortnightly account system will be replaced by 10-day rolling settlement. This means investors will have to pay for their shares 10 days after buying them instead of 10 days after the end of the fortnightly account in which they bought the shares.