Exchange prepares brokers' test to ensure Year 2000 compliancy

PUBLISHED : Thursday, 13 August, 1998, 12:00am
UPDATED : Thursday, 13 August, 1998, 12:00am

The stock exchange is proposing to stage four rounds of tests with stockbrokers to ensure the local securities market will not be affected by the millennium bug problem.

There are fears that the millennium bug, or Year 2000 problem, which is expected to arise from non-compliant computer systems which read the year 2000 as year zero, could cause havoc in computers when the date arrives.

The stock exchange said yesterday the modification of the software in its own trading system had been completed in June.

The exchange said it would conduct a pilot test in December, and would have another three rounds of tests in January, March and June next year.

The tests would include all exchange broker members and information vendors for the securities industry.

The proposed test plan has been submitted to the Y2K Securities Industry Working Group, formed by the Securities and Futures Commission, the exchanges, the clearing houses and the leading merchant banks.

The exchange and the clearing house will jointly prepare a test kit for stockbrokers in October, so they can test whether their in-house systems are ready for full-scale testing.

About 99 per cent of stockbrokers have submitted their plans to the exchange for tackling the problem.

The exchange said it would group its broker members into three categories according to progress in ensuring compliancy.

'High-risk categories will be required to submit monthly progress reports. Others will be on a quarter ly basis,' the exchange said.

The exchange plans to audit about 60 members before the end of the year to check on their progress.

It has also urged all listed companies to disclose how they are complying in their interim and annual reports.

The exchange has arranged a conference with all listed companies' directors where fund managers will be invited to discuss how they will treat the shares of firms which are not Year 2000 compliant.