The broking community remains a technological backwater, with almost half of UK brokers confirming international trades by fax.

The survey also revealed substantial confusion among brokers over the likely effects the proposed merger of the London Stock Exchange and Deutsche Börse will have on settlement of international equities. Many believe the cost of settling trades in Europe is still too high.

Settlement and operations managers in 68 private client and institutional brokers in the UK were questioned about their views on trading international equities and effect of the iX merger on trade settlement.

Commenting on the findings, Neville Margison, technical director at TCA Synergo says: "As a result of the mergers between exchanges, clearing and settlement houses and as well as improved online technology, cross-border trading should, in theory, become much easier. There are still many questions to be answered over the iX merger however, particularly over which settlement system will be favoured."

Although 84 per cent of brokers already offer international equities trading for their clients, take up remains low and over 30 per cent of brokers never buy or sell overseas equities at all. However, brokers believe this will soon change.

The survey also revealed that 40 per cent of respondents had no idea of the likely effects of the merger of the London Stock Exchange (LSE) and Deutsche Börse on clearing systems for international equities. A further 11 per cent thought that the merger would have a negative effect on clearing facilities.

A clear majority (69 per cent) of UK-based brokers trading in international equities feel that the current facilities for settlement across the European Union are good or adequate. However, many respondents commented directly that they believed that the systems required harmonisation to improve service further. One respondent stated: "...we use Euroclear, which could be better. It could all do with harmonising." Another respondent commented: "We need to have one settlement system - there is no consistency, it is all mismatched."

Almost half of all respondents felt that the cost of current settlement arrangements across the EU were over-priced. Twelve per cent stated that the costs were prohibitive, whilst 36 per cent believed that they were expensive. 29 per cent of brokers believed settlement costs were reasonable and a mere 2 per cent felt that the system was cheap.

In the new e-world, an incredible 49 per cent of brokers still use the fax to confirm international equity settlements. 38 per cent use the telephone and 34 per cent email. The interbank Swift network is used by 16 per cent of UK- based brokers.

European settlement systems are a clear focus for broker concern, says Neville Margison. "This has important implications for the merger of the LSE and Deutsche Börse, and sends a strong signal to those pushing hard for such a union. Brokers believe that European settlement services are expensive and not particularly well organised - this problem needs to be tackled head-on if brokers are to be satisfied with talk of mergers in bourses across the continent, but also in wider global markets."

Brokers must also get their own houses in order, notes Margison: "Brokers need to realise the clear benefits of technology in equity trading - certainly in terms of coping with the increased trading volumes that so many of them expect, but also that integrated systems are the best way to tap the global marketplace."