On July 1 the Bank of England will publish proposals for a replacement for the ill-fated Taurus share settlement system. The Bank is taking over control of the project from the Stock Exchange which has largely lost the confidence of users, traders and software houses alike. The Bank’s plan will call for a much simpler system than Taurus to be built within three years. Whether the Bank will write the system itself or use outside developers and packages will depend on the results of a nine month consultative and fact-finding period. A sneak preview of the bank’s thoughts were presented last Thursday by the City Consultants, which liaises between the Bank and the Security Industry Software Association. The Bank is calling for an interim measure whereby the Stock Exchange itself would upgrade its existing Talisman Share trading system. Currently Talisman works on an account period basis, whereby trade over a two-week period is collected into a batch and then settled within the next week. Under the new rolling settlement scheme, due to be in place by July 1994, shares will be paid for 10 days after they are bought, and a reduction to five days is envisaged six months later. But will the Bank succeed where the Exchange failed? Sources at the meeting suggest that the industry is generally bullish about the proposals. In particular the focus on simplicity and the fact that it is a single body commissioning and paying for development rather than the disparate stock exchange members is seen as a boon. The proposed system retains both money brokerage and share registrars in their current form, where Taurus was to computerise these functions.
