Fidessa to gain from tighter regulation of financial firms

(Reuters) - Fidessa Group Plc said on Monday it expected revenue to rise 4 percent this year on a constant currency basis as changing U.S. and European regulations boost demand for its trading software.

Shares of the company, which provides trading and investment technology for the financial industry, rose as much as 7 percent to a 16-year high. The stock was the top percentage gainer on London's FTSE 250 index.

Regulators are putting a number of measures in place to prevent market abuse in the financial industry by requiring companies to make pre-trade risk checks, enhance transparency during trade reporting and monitoring algorithms.

Many firms have picked Fidessa's software - which manages different asset classes such as foreign exchange, futures and equities trading through one system - to cut costs at a time of growing compliance burdens.

Fidessa said it was planning a number of major software releases in 2017 as it expected clients to update their systems to meet new regulations, including the MiFID II trading rules set to come into effect from January 2018.

These regulations are expected to be implemented across Europe despite Brexit. Fidessa gets about a third of its sales from Europe.

Fidessa's largest opportunity would come from cross-asset execution platforms, Jefferies' analysts said. The company said on June 6 that it signed a deal to provide the platform to securities service provider ABN AMRO Clearing.

Fidessa's revenue rose 9 percent to 153.8 million pounds ($203.7 million) in the six months ended June 30, partly boosted by the weakness in the pound ahead of Brexit. On a constant currency basis, revenue rose 4 percent.

Over the period, the pound lost about 7 percent against the dollar and about 14 percent against the Japanese yen, two of Fidessa's main trading currencies.

Fidessa said it would see further revenue gains if the sterling remained at current levels.

Panmure Gordon analyst George O'Connor hiked his full-year forecast for earnings per share to 88.5 pence from 83.7 pence.

($1 = 0.7550 pounds)

(Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Sunil Nair and Anil D'Silva)