Eight European stock markets have taken the first step towards a European super-bourse aimed at fending off mounting competition from the US.
They have signed a memorandum of understanding formalising plans by Paris, Zurich, Madrid, Brussels, Amsterdam and Milan to join a ground-breaking alliance unveiled by the London Stock Exchange and Frankfurt's Deutsche Borse almost a year ago.
The managing director of the Irish Stock Exchange, Mr Tom Healy, said smaller European stock exchanges were not involved in this first move towards a pan-European market.
He said: "If the alliance matures as we hope, then we will join it next year. We have already been in contact with London and Frankfurt.
"It makes sense for the bigger exchanges to push this forward before smaller exchanges join in."
The need for a pan-European exchange has become more pressing, with US competition intensifying and the new euro creating a huge single market with shares on 11 exchanges being traded in the same currency for the first time.
"Its fundamental commitment is to deliver a low-cost, efficient and accessible equity market infrastructure to enable issuers, investors and market participants to take full advantage of the opportunities arising from the development of a pan-European capital market," Mr Antonio Zoido, the Madrid stock exchange chairman said following the signing in the Spanish capital.
But observers said progress had been slow and much work remained to be done before investors had a one-stop shop for top European shares.
A short joint statement from the eight offered no fresh clues about the exchange's structure, trading hours, common rules, preferred stock index benchmark or timetable - issues observers say must be resolved.
"It's been close to a year since the original announcement, and the absence of details is indeed rather disquieting," Mr Paul Horne, European equity economist at Salomon Smith Barney, said. A Deutsche Borse spokesman said there was also no decision on the technology planned for the single exchange. The founding two-member alliance has said previously its joint trading platform would be operational "beyond 2000".
It has been under pressure to provide details of its plans to introduce a trading platform to counter reports that talks were bogged down over ownership structure and other key issues.
Differences in size and culture would make it tricky to create a single trading platform for blue chips, said analysts, who stressed the need to get it right from the start.
Some market players worry that European bourses have been slow in moving towards a pan-European exchange, while the New York Stock Exchange and Nasdaq have already set out plans to extend their sessions to attract more European investors.
London and Frankfurt have polled members about a common trading day, but there is no sign of sessions being extended.
Paris and Zurich, later joined by Milan, decided to press ahead with a cross-membership alliance of their own, due to come on stream next year.
Mr Leo Hug, spokesman for Zurich-based Swiss Stock Exchange, said work on the Zurich/Paris/Milan alliance would continue.
"This is not co-operation against the European talks among the eight, but something in addition," Mr Hug said.
As the bourses press ahead with closer ties, Europe's plethora of clearing and settlement systems is also facing rationalisation.
