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Financial Services Providers Need to Act Now to Ensure Readiness for Retail Distribution Review Deadline

London, UK, 3 January, 2008— Callidus Software Inc. (NASDAQ: CALD), the leader in Sales Performance Management (SPM) today warned that UK financial services providers need to act now to meet the Financial Services Authority (FSA)’s deadline on reforming sales of retail investment products such as pensions, endowments and ISAs. The FSA's Retail Distribution Review (RDR) goes live in 2008, and means that financial services companies need to introduce more sophisticated systems for managing commissions paid to brokers and financial advisers according to Callidus.

The RDR has been introduced following recurrent problems in the market for the distribution of retail investment products. Allegations of misselling of pensions and endowments and a lack of transparency concerning commission payments paid to financial advisers have led the FSA to act to increase professionalism in the industry.

The sale of retail investment products without a clear audit trail or standardised commission structure is likely to lead to providers falling foul of rules once they are finalised. The FSA is scheduled to deliver an interim paper on requirements in April 2008, ahead of full implementation plans in October 2008*.

Leveraging its vast experience in the sector, Callidus Software argues that the fastest and quickest way to meet these new legislative compliance requirements is to look to technology. Providers must introduce enhanced IT systems in order to automate their commissions management and provide total transparency and visibility over payments. Given the likely scope of the new rules, providers risk non-compliance or reduced business performance if they fail to do so. Callidus believes that existing software, such as legacy systems written in-house is neither comprehensive nor sophisticated enough to meet the needs of the RDR legislation.

"Given widespread concerns about misselling in the past, the RDR will be a watershed moment for commissions on investment products," said Bill Schuh, vice president for Europe at Callidus Software. "However the rules are finalised, it's highly likely that future sales treatment will be split between a pure product commission model and a consultancy one with little scope for the lines to blur. In order to maximise effectiveness of their sales channels, financial services providers therefore need to be thinking now about improving visibility and auditing of their commission processes capabilities through software that will allow them to comply and compete better in a rapidly changing sales environment."

Callidus Software provides on-premise and on-demand sales performance management software that enables closer management of incentive compensation, tracking of actual sales versus planned sales and more effective product administration across both direct and broker/adviser sales channels, which aligns corporate objectives with sales execution.

"The smart providers who, regardless of the legislative specifics, accept that the handling of commissions has to change, will strongly benefit from first mover advantage. Those automating payment of commissions and providing full visibility into the performance of the broker and adviser channel stand to gain a significant leap in capabilities compared to their competitors," said Schuh.

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Notes to editors:

* See http://www.fsa.gov.uk/Pages/About/What/rdr/index.shtml for more information

About Callidus Software®

Callidus Software (www.callidussoftware.com, NASDAQ: CALD) is a leading provider of on-premise and on-demand Sales Performance Management (SPM) solutions to global companies across a broad range of industries. Our software allows innovative enterprises of all sizes to strategically manage incentive compensation, set quota targets, administer producers, and align territories, resulting in improved sales and distribution performance. Over 1.8 million salespeople, brokers, and channel representatives have their sales performance managed by Callidus Software’s products.

© 1998-2007 Callidus Software Inc. All rights reserved. Callidus Software, the Callidus Software logo, Callidus TrueAnalytics, TrueComp, TrueComp Grid, TrueComp Manager, TrueConnection, TrueFoundation, TrueInformation, TruePerformance, TruePerformance Index, TruePerformance Indicator, TrueMBO, TrueAllocation, TrueProducer, TrueQuota, TrueReferral, TrueResolution, and TrueService+ are trademarks, servicemarks, or registered trademarks of Callidus Software Inc. in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

Press Contacts:

Jock Breitwieser
Callidus Software Inc.
Tel: +1 408 975 6683
Email: pr@callidussoftware.com

Sam Grace/Chris Measures
Rainier PR
Tel: +44 (0) 20 7494 6593
Email: callidus@rainierpr.co.uk

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