Europe is compliant, but is it ready to compete as MiFID goes live on November 1st?

Paris, London, 24 October 2007 -Atos Origin, an international IT services company supporting business processes for 9 of the top 10 European banks, argued today that European financial
firms are not ready to compete in the new market that will emerge when the Markets in Financial Instruments Directive (MiFID) comes into effect on November 1st, 2007.

Investment in MiFID is below expectations – Research conducted by Atos Consulting, the business consulting arm of Atos Origin, on how prepared financial organisations are ahead of MiFID,
suggests that a ‘wait and see’ attitude prevails in European financial firms. Atos Consulting analysed spending patterns at 15 investment banks and compared them with the cost model that the
company first published in June 2005 and then adjusted in February 2006. The results showed that financial firms have spent 20-25% less than initially expected.

From the research, it appears that firms are deferring investments in smart route technology because they want to see if the liquidity market will fragment as predicted. It also seems that they
also expect the existing manually intensive solutions to satisfy customers’ demands for best execution and to continue to be cost effective.

Losing competitive advantage – Firms do not see MiFID as an opportunity to distinguish themselves from their competitors, but merely as a compliance exercise. In doing so, financial
firms risk losing their competitive advantage. If the fragmentation occurs soon after the implementation of MiFID, then companies that have not invested and are not able to produce robust
statistics on execution quality, may find that their marketing programme is hindered, when the time comes to review execution venues – no later than October 2008.

Change is underway – However, change is underway. In a presentation to industry watchers that took place today, Jeremy Bryson, Senior Vice President for Financial Services at Atos
Origin, explained that MiFID sets the stage to make Europe a more attractive market for investors. Change is already underway even though half of Europe is late in amending national laws to
incorporate MiFID. New trading venues, such as Chi-X, are capturing market share from the traditional players and European exchanges are reporting a 50% – 120% increase in 2007 trading volumes
over 2006 levels with an average 20% smaller trade size 1.

Bryson argued that to thrive in the post-MiFID market, organisations need to differentiate their policies and demonstrate best execution through publication of trade statistics. Furthermore, he
claimed that financial firms need to maximise their order flow volume and reduce marginal transaction costs to maintain their competitive advantage.

Ken Tregidgo, Global Head of Strategy & Business Development, said:
“What we at Atos Euronext Market Solutions (AEMS) have actively been doing is talking to our clients about what strategic opportunities the new world of MiFID will afford them, how they could
position themselves to compete differently in that arena and then providing them with the technology to do so.”