The project is one of the largest to fall victim to the economic slowdown, which has left firms reluctant to invest in major IT projects.
But analysts warned that UK investment banks would still have to invest heavily in their IT systems over the next five years to fully automate the trade process from beginning to end - straight through processing - and remain competitive in world markets.
"For the UK there is less impact and less urgency but IT managers in investment banks still need to be looking at straight through processing," said Daniel Mayo, a lead analyst at Datamonitor.
Financial firms will have to update their IT systems and co-operate to ensure that errors during the trade process are reconciled automatically. Large US investment banks will have to spend up to £100m each to enable straight through processing and one-day settlement, Mayo estimated.
The US securities industry last week put on hold its goal of introducing one-day settlement of securities transactions by 2005. Instead it will prioritise developments in straight through processing.