Finance houses unprepared as deadline approaches

Nearly two-thirds of finance houses will be unable to comply with the European Markets in Financial Instruments Directive before the deadline expires in two weeks' time, experts at Storage Expo have warned.

New research suggests that 64 per cent of finance houses are unsure of being able to comply with the new directive, which requires firms to provide full details of financial trades within a reasonable time.

Companies that are unable to do so risk fines of hundreds of thousands of euros.

"If you have not already got going it is too late to start now," said P J Di Giammarino, chief executive at think-tank JWG-IT Group which specialises in European IT issues.

"A lot of banks have left it too late in the day. Generally the tier-one American banks are ready, but there are a lot of stragglers."

Di Giammarino explained that the situation is complicated by the ongoing banking crisis in the US and the rest of the world.

Companies trying to build systems to track trades over the coming financial year are uncertain whether the budgets will be available.

"There are a lot of hard calls to make," he added. "Do you spend on IT to protect your future profits, or try and protect your existing cash?"

Di Giammarino warned Storage Expo delegates that companies need a clear strategy in place to record all transactions, because in five years' time companies could face calls from regulators for information which they are unable to provide.