No plastic, no shares rule in Bank plan for private deals

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The Independent Online
THE BANK of England has already decided that the replacement for the scrapped Taurus automated share settlement system will include 10-day rolling settlement for private client brokers, to be introduced midway through 1994, writes John Willcock.

Investors will be encouraged to use Switch and Delta debit cards to settle their bills.

The new system for private clients will be based on the existing Talisman system, and will be switched to a five-day rolling settlement as soon after mid-1994 as possible. Users will then have to pay by debit card, since the postal and cheque-clearing systems would take too long.

A three-day rolling settlement system had previously been mooted, but significantly this will not figure in the Bank of England's conclusions on a Taurus replacement to be published shortly. A working party was set up under the Bank director Pen Kent after Taurus was cancelled. Cost of cancellation to the City now appears to have been about pounds 300m rather than the pounds 400m suggested at the time.

A majority in the securities industry now favours removing responsibility for development of new share trading systems from the Stock Exchange, which lost credibility in the Taurus fiasco. The Bank of England is favourite to take over the role.