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GISSING SURVEY REVEALS BUDGETS ARE NOT YET BEING SET ASIDE FOR MIFID IMPLEMENTATION

London, 23 November 2005 – Three quarters of financial institutions questioned about the European Union’s Markets in Financial Instruments Directive (MiFID) have not allocated any budget for its implementation, according to research carried out by Gissing Software, a leading supplier of software and services for real-time trading.

MiFID – which is due to become law in 2007 – will be applicable to all businesses involved with trading in financial instruments, as well as businesses that deal in advisory services. The directive will enable banks to offer financial products across all 25 EU member states as well as Iceland, Norway and Liechtenstein. MiFID will extend current opportunities for passporting services across Europe, along with extending the regulation around investor protection and market transparency.

The survey – which canvassed opinion from global financial institutions including investment banks, market data vendors and investment houses – showed that while 71% of respondents believe that MiFID will affect them, and more than half have appointed someone to manage the MiFID implementation, only 21% have definitely allocated budget for the implementation.

Findings from the survey also revealed that the majority of the firms questioned believe that MiFID will reduce trading margins, while largely leaving prices unaffected – squeezing the profitability of traders. As a result, 40% of the respondents believe the new directive will lead to fewer trading companies.

The directive will eventually impact all asset classes in the EU except pure FX transactions. However, the results showed confusion about what markets MiFID will affect, with 40% of the respondents incorrectly believing that MiFID will affect all FX transactions.

Despite the major changes expected to front and back-office systems, the survey shows that over 60% of firms questioned believe that MiFID will achieve its primary objective of increasing the transparency of equity prices.

Mike Vieyra, CEO, Gissing Software, said: "The findings of the survey demonstrate there is still much confusion about how MiFID will impact financial institutions and many are still unwilling to commit budget to this area. With less than two years to implement it remains unclear whether all institutions will meet the deadline and what will happen to those that don’t. To help our customers prepare Gissing will be providing the appropriate MiFID handlers – so that they can make their MiFID data available on market data platforms and contribute both pre and post-trade data to their choice of venues."