The British Bankers Association has called for a move to a 10-day rolling settlement period for institutions by the summer, rather than the present fortnightly account.
It suggested the switch should be carried out before the new settlement system was introduced, and that the decision be made before a Bank of England task force on settlement reports in June.
Kit Farrow, director general of the British Merchant Banking and Securities Houses Association (BMBA), said: 'There is a strong will in the City to make progress in the best way possible. There is a lot of room for improving the system without too much building of elaborate structures, and much interest in moving to a rolling settlement system. We expect to make a submission to the task force this week.'
Lord Inchyra, secretary general of the BBA, said: 'We think a decision to go rapidly to rolling settlement can be made without waiting until the whole task force report is finished.' He thought it might be possible to implement it within the next six months, but that was for the Stock Exchange to decide.
The banks are pressing for a 10-day rolling settlement - and a reduction to as low as five days as soon as possible - because it will reduce the risk of defaults in the market.
Brian Pitman, vice-president of the BBA and chief executive of Lloyds Bank, said the banks believed the key to replacing Taurus was to set up a computerised institutional settlement system, leaving retail investors to continue with the existing paper-based settlement. 'Most individuals like to have a piece of paper as evidence.'
This two-tier system would be the BBA's recommendation to the Bank of England task force. 'From our point of view we will be emphasising that the key objective is an institutional settlement system,' Mr Pitman said.Reuse content