Two thirds of EU institutions will not meet MiFID deadline

A new study published today by HandySoft Global Corp., a leading provider of business process management (BPM) solutions, has revealed that almost two thirds (60%) of European financial institutions are not expected to meet the EU Markets in Financial Instruments Directive (MiFID) by the deadline of November 2007. The research confirms that UK-based financial institutions are in a relatively more advanced state of preparation than the EU average, but nearly a third (27%) are still unlikely to comply in time.

Based on in-depth telephone interviews with 100 European financial institutions and a further sample of specialist corporate lawyers, HandySoft also found that only a third of European firms (33%) and just over half of UK firms (52%) have appointed a dedicated MiFID compliance officer, implying that little progress has been made since April 2006 when KPMG put the European average at just 29%.

However, on a positive note, the research highlighted that one in ten (9%) European financial organisations see "a great deal of overlap" between their MiFID implementations and other compliance tasks that they currently face. A further 23% are discovering "a fair amount of overlap" in transferable benefits, whereas the majority (68%) believe that the necessary work and IT implementations offer only 'a little' overlap of re-usable benefits and technology with other compliance requirements.

These findings appear to indicate a growing polarisation of financial firms into those using compliance as a platform for wider business process improvement, transparency and competitive reform, and those who regard compliance as a one-off 'box-ticking' exercise. This could result in the competitive gap widening further between leaders and laggards in the European financial services industry.

Wendy Cohen, Sales & Operations Director EMEA, HandySoft Global Corporation, comments, "These research findings corroborate our recent experience of European organisations' MiFID compliance efforts. Many compliance preparations are indeed behind schedule but it is not advisable to play a waiting game, as non-compliant firms could potentially lose business and attract regulator-imposed penalties, from fines to suspension of trading. But it is reputational damage which financial firms have most to fear, as the market is increasingly defined by reputation and customer service.

"The IT implementation that supports MiFID compliance has become an increasingly major element of an investment company's competitive differentiation. Firms must seek to automate compliance processes, without which it is virtually impossible to prevent costs escalating to unsustainable levels. Importantly, utilising appropriate technology solutions should provide a valuable opportunity to explore areas of overlap with other business processes and turn the apparent burden of MiFID to wider business advantage.

"Anecdotal feedback from respondents told us that Business Process Management (BPM) software – because of its heritage as a flexible and adaptable toolkit that can sit on top of ageing ERP and homegrown systems – is proving a popular option for the more pioneering compliance initiatives. Another reason for this is undoubtedly the ability of the new breed of BPM solutions to adapt to dynamic, one-off tasks, as well as ongoing, predictable processes. Research from the Financial Services Authority has shown that some 90% of the MiFID compliance effort has to be devoted to one-off activities, with only 10% of the effort (and expenditure) resulting in ongoing compliance outputs. Therefore it is critical that the technology an organisation chooses can mould flexibly to the one-off MiFID requirements as well as delivering value for the long-term."

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About HandySoft Global Corp.
HandySoft Global Corporation is a leading global provider of Business Process Management (BPM) solutions. By orchestrating people, information and processes, HandySoft delivers innovative enterprise BPM solutions that automate and simplify processes, enforce best practices, improve quality and productivity, and foster collaboration. HandySoft takes a unique approach to BPM by providing a framework for both structured and dynamic work.

BizFlow®, HandySoft's award-winning platform for structured BPM, includes tools for designing, automating and monitoring business processes, presenting and accessing work, integrating existing IT systems and administering the platform itself.

HandySoft also offers OfficeEngine™, the industry’s first solution to combine the power of traditional BPM with the flexibility of e-mail. OfficeEngine enables knowledge workers to create, assign, sub-delegate, track and execute mission critical work in real time. By providing executives with increased visibility and control and driving knowledge worker productivity, this dynamic BPM offering allows organizations to benefit from greater accountability and insight into business operations.

As a global solutions provider, HandySoft Global is headquartered in Vienna, VA, USA, with a subsidiary in London, UK, and with strategic partner representation throughout the world. HandySoft has implemented process management solutions at hundreds of sites worldwide. For more information call +1-703-442-5600, email info@handysoft.com or visit http://www.handysoft.com.

HandySoft, the HandySoft logo, OfficeEngine, BizFlow and BizFlow Accelerator Suites are trademarks of HandySoft Global Corp. All other trademarks are the property of their respective owners.

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