DATA SYSTEMS & SOFTWARE INC.

                                 CODE OF ETHICS

                         FOR THE CHIEF EXECUTIVE OFFICER
                          AND SENIOR FINANCIAL OFFICERS

         Data Systems & Software Inc. (Company) has adopted this Code of Ethics,
which  applies  to the  Chief  Executive  Officer  (CEO)  as well  as the  Chief
Financial Officer, Director of Finance,  Controller of the Company,  Controllers
of  the  Company's  subsidiaries,  and  any  other  persons  performing  similar
functions as determined by the Audit Committee (Senior Financial  Officers).  If
the CEO or any Senior Financial  Officer is aware of any reportable event of the
type  described in this Code of Ethics,  such officer  must  promptly  bring the
matter to the attention of the Audit Committee of the Company.

    1.   The CEO and each Senior  Financial  Officer are  responsible  for full,
         fair,  accurate,  timely and understandable  disclosure in the periodic
         reports  required to be filed by the Company  with the  Securities  and
         Exchange Commission.  Accordingly,  it is the responsibility of the CEO
         and each Senior  Financial  Officer to report any untrue  statement  of
         material  fact and any omission of material fact of which he or she may
         become  aware  pertaining  to  information  prepared  by  him or her or
         employees  in his or her  area(s)  of  responsibility  that  affect the
         disclosures made by the Company in its public filings.

    2.   The CEO and each  Senior  Financial  Officer  are  responsible  for the
         Company's  system of internal  financial  controls and shall report any
         information he or she may have concerning (a) significant  deficiencies
         in the design or operation of disclosure  and internal  controls  which
         could  adversely  affect the ability of employees in his or her area(s)
         of  responsibility to record,  process,  summarize and report financial
         data or (b) any  fraud,  whether or not  material,  that  involves  any
         employee  who  has a  significant  role in his or her  area's  internal
         controls.

    3.   The CEO and each Senior Financial  Officer shall report any information
         he or she may have  concerning  any  violation  of this Code of Ethics,
         including any actual or apparent conflicts of interest between personal
         and  professional  relationships  involving any employee of the Company
         who has a significant  role in his or her area's  financial  reporting,
         disclosures or internal controls.

    4.   The CEO and each Senior Financial  Officer shall report any information
         he or she may have  concerning  evidence  of a  material  violation  of
         securities  or other  laws,  rules  or  regulations  applicable  to the
         Company and the operation of its business,  by the Company or any agent
         thereof.

    5.   The Audit Committee shall determine,  or designate  appropriate persons
         to  determine,  appropriate  actions  to  be  taken  in  the  event  of
         violations  of this Code of Ethics.  Such  action  shall be  reasonably
         designed  to  deter  wrongdoing  and  to  promote   accountability  for
         adherence  to this  Code of  Ethics,  including,  among  other  things,
         disciplinary action up to and including  termination of employment.  In
         determining  what action is appropriate in a particular case, the Audit
         Committee  or  its  designee  shall  take  into  account  all  relevant
         information,  including  whether the violation  was promptly  reported,
         whether a violation of the law has occurred, the nature and severity of
         the  violation,  whether  the  violation  was a  single  occurrence  or
         repeated  occurrences,  whether  the  violation  appears  to have  been
         intentional or inadvertent, whether the individual in question had been
         advised  prior to the  violation as to the proper  course of action and
         whether  or  not  the  individual  in  question  had  committed   other
         violations in the past, the penalties imposed,  if any, in the past for
         comparable violations and other relevant factors.

Dated:   March 15, 2004