View from City Road: City must come first

THIS time there should no be no extravagant claims. In the 1980s, when Taurus was in the planning stage, the new settlement system was going to be in the interests of private shareholders, companies and the City. Sadly, it fulfilled none of these hopes.

Pen Kent, who is leading the Bank of England task force on finding an alternative to Taurus, must start by stating loud and clear that the solution will first and foremost be good for the City. If it helps anyone else so much the better. But the priority should be unambiguous.

As recently as three years ago private shareholders were told that they would find it cheaper and easier to deal under Taurus. It quickly emerged that individuals would have ended up paying more, at least for an initial period. The same may well be true under any replacement.

Companies, worried about the ability of predators to buy shares secretly, were told they would still be able to find out who their shareholders were. The Government was keen on entrenching this 'name on register' concept, which helps to explain why the regulations were so complex.

If an acceptable replacement for Taurus is to be found in a hurry, it is likely to involve a change to this concept - and more rather than less use of nominees. Companies may have to accept that their rights to a full and up-to-date share register will be reduced, although there may yet be a deal to be done on beefing up Section 212 powers, which allow companies to identify the beneficial holders of shares held in nominee names.

That way Mr Kent might be able to keep his focus on the priority, which is to make London an attractive place to deal in shares.