LONDON: Eight European stock exchangessaid on Thursday they will launch a "virtual" pan-Europeanbourse via a common electronic link in November 2000 -- earlierthan planned but not the single trading platform originallytrumpeted."Up to now dealers have to log on to eight differentbourses," said Deutsche Boerse chief executive Werner Seifert."Now there will be one electronic plug and one common virtualblue-chip market," reports Reuters. Seifert and the heads of the seven other partners in thepan-European project were speaking after a joint meeting inBrussels on Thursday.
"The common European electronic bourse is to start inNovember 2000. That will be before the competitors' projects,"Seifert added.
The "common market model" agreed will include a harmonisedrule book and will expand overall share trading and make iteasier for investors to hold cross-border portfolios, theexchange officials said.
The London Stock Exchange and the Deutsche Boerse unveiled astrategic alliance to develop a joint electronic tradingplatform for blue chips back in July last year.
In May this year, six other bourses joined the project --Madrid, Milan, Amsterdam, Brussels, Paris, and Zurich.
The alliance has come under heavy fire for being too slow inpressing ahead with its project when competition fromalternative electronic trading systems is increasing.
The partners said on Thursday that an electronic interfacewould be cheaper than the original plan of a single tradingplatform.
"It's the fastest and most cost effective way to create onesingle market solution," said Olivier Lefebvre, chairman of theBrussels bourse.
The superbourse project has been dogged by regular reportsof failure among the alliance members to agree basic issues suchas single technology, stock index benchmark, and ownership.
Opting for an interface that lets all the bourses keep theirown systems rather than having a single platform may resolve thethorny issue of whose technology dominates, but it raises otherquestions such as how will trading costs be cut, observers said.
"The key point is to have one computer system," said RubenLee, director of the Oxford Finance Group and author of 'What isan Exchange?'. "Where are the economies of scale here?" Leeasked.
Although the original timeframe was to launch thesuperbourse sometime "beyond 2000", bringing it forward a fewmonths still gives competitors an easy deadline to beat and timeto approach individual bourses with alternative plans, Lee said.
"A year allows all the other competitors to be faster andnimbler and it allows participants in the project to reassesstheir position," he added.
Thursday's announcement did not mention other tricky issuesfaced by the superbourse project such as which pan-Europeanstock indices they regard as benchmarks.
There was also no guidance on the type of common clearingand settlement system the superbourse would like to see.
Rival pan-European clearers European Clearing House andEuroclear are battling it out to become the regional clearer ofchoice.
The various exchanges in the alliance have vested interestsin rival benchmarks and clearing systems.
Thursday's announcement follows Monday's step towards commontrading hours, which means the opening bell is now rung at thesame time in London, Frankfurt and Paris.
Last week, German banking sources confirmed that leadinginvestment banks -- the key dealers on bourses -- were lookingat ways to trade pan-European stocks on their own exchangebecause of disappointment over the slow pace of progress by theexchanges.
The alliance will be hoping that Thursday's announcementwill help dispel reports that the project has hit a wall.
-- Additional reporting from the Brussels bureaux and SophieWalker in Paris.