SunGard says 53% of respondents to a quarterly poll of 300 investment firms said their preparations for the directive are "ahead" or "right-on-track". Although this shows an overall increase in MiFID readiness when compared to previous polls, it still implies that almost half of firms are struggling in their preparations.

The survey also found that half of financial services firms are unhappy with the assistance they are receiving from their national regulators in preparing for MiFID. Around a third (32%) of respondents said their national regulators were "bad" in helping them to get ready for the directive, while 19% said their regulators were "very bad".

In the UK, respondents were divided on whether the Financial Services Authority's (FSA) minimal guidance, principles-based approach to MiFID was a good one - 54% believed this was the best way to prevent regulatory overload, while the remaining said the approach adds to the compliance task and makes it difficult to understand exactly what requirements the FSA wants.

Ensuring and proving best execution remains a big challenge for firms, with half of respondents (50%) saying they will not know how to ensure best execution for equities right up to the 1st November deadline. Furthermore, where once pre- and post-trade statistical analysis of trades were chosen as the processes most likely to be used to ensure best execution, manual review has now become an increasingly popular method - cited by 58% of respondents in July 2007.

However recordkeeping is an area where the results show a dramatic improvement, says SunGard. In April 2007 - following the release of the Committee of European Securities Regulators' (CESR) proposed recordkeeping requirements - two thirds of respondents indicated that they would struggle to handle these new regulations. But over half of respondents now believe they would be ready to handle the recordkeeping requirements, with only 12% now indicating they will struggle.

The research also found that there has been a marked shift in attitudes towards systematic internalisation - where firms execute client orders against their own order book. SunGard says between September 2006 and April 2007 the split between those firms considering becoming systematic internalisers and those not was consistently 30-70, but in the last three months this has changed to an even 50-50 split.

For buy-side firms, 38% believed that the most common reason to become a systematic internaliser would be to drive down and control the cost of best execution. On the sell-side, European expansion was the greatest driver.

Overall the survey found that opinions are still divided on whether MiFID will have a positive impact - the majority (54%) see MiFID as just "another piece of compliance". In addition, only 42% of respondents believe that MiFID will be good for Europe's economy in the next 5-10 years, with over a third still undecided.