The chief executive of Clearstream, the securities processing arm of Deutsche Borse, is stepping down in the wake of an investigation into its business activities by the authorities in Luxembourg.

Clearstream is expected to confirm on Friday that Andre Lussi is leaving. Other senior members of the executive management team could also be going, according to people familiar with the matter.

Deutsche Borse owns 50 per cent of Clearstream, which is under investigation by a public prosecutor appointed by the Luxembourg finance ministry.

A book by a former Luxembourg banker earlier this year made allegations of money laundering against Clearstream, which holds accounts containing stocks, bonds and other types of securities for millions of investors.

Clearstream denies the allegations and has started legal proceedings for libel. Earlier this week it promised to co-operate fully with the public prosecutor and said the findings of an internal investigation, which found nothing amiss, would be made available in full to the investigator.

Neither Clearstream nor Deutsche Borse would comment last night.

Mr Lussi's departure is likely to be greeted with relief at Deutsche Borse. Earlier this year, the unit was forced to lower the value of assets it holds for investors after a "client error" led to an overstatement of some E1,000bn.

Werner Seifert, chief executive of Deutsche Borse, has made it clear he would like to buy the remainder of Clearstream, which is owned by a consortium of international banks.

Mr Lussi's departure is likely to lead to a shake-up of Europe's clearing and settlement industry. Brussels-based Euroclear, the biggest European clearing house, has been seeking to merge with Clearstream and is certain to renew its overtures.

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