Huge numbers of senior management and board members at financial services companies are still ignorant about the most important legislation to affect the sector in years.

A study by KPMG has found that of the 199 financial services companies looked at, nearly half lacked awareness over the implications of the markets in financial instruments directive, or Mifid as it is known. The directive comes into effect towards the end of next year and will require the City to invest substantially in internal control and accounting procedures.

Yet despite this, only 29% of companies have assigned a project manager to oversee the implementation of Mifid, and only 17% have allocated a budget to prepare for Mifid. Less than 50% of respondents said their organisation had even reviewed the directive.

'For organisations to gain the full benefits of Mifid it is imperative that they treat it as a business issue: it is not just about internal compliance,' said Jonathan Jesty, financial services partner at KPMG. 'Unlike much regulation that has gone before, it is likely to have a significant impact on the wider financial services market place.'