|
|
Tuesday, July 14, 1998
Cheering result from Wall Street millennium test
By AMANDA LANG
New York Bureau The Financial Post
Early results are cheering from the first broad test of how Wall Street stock exchanges and securities firms will bear up under the threat of the year 2000 computer bug. But analysts warn it is too soon to break out the bubbly.
Yesterday's test run, the first day of two weeks of simulated trading by 29 securities firms and 12 stock exchanges, passed without incident.
The trial was developed by the U.S. Securities Industry Association (SIA), and is designed to measure the efforts of individual securities firms to combat the year 2000 problem, and to uncover any unforeseen problem in linking their systems together to execute trades.
Computer systems worldwide could fail on Jan. 1, 2000, since many programs were written to read just the last two digits of a year: in the dawn of the new millennium, some computers will think the year is 1900.
A recent cross-industry survey conducted by Merrill Lynch & Co. found most large U.S. companies are well aware of the year 2000 problem and are well on the way to fixing it.
The challenge, however, lies in the unknown. In particular, many companies may find that while their own systems have been upgraded to address the date-related problem, some of their customers', vendors' or business partners' systems have not.
That worry lies at the heart of yesterday's testing, which is a trial run for a test by all Wall Street firms, to be conducted next spring.
The SIA plans to issue a report on the current trading tests by Aug. 10.
In the meantime, scripts developed to test various kinds of trades will be tailored to test the system as fully as possible, an SIA spokesman said. The industry group has been working on the issue for three years.
Peter de Jager, president of Toronto-based consulting firm de Jager & Co. Ltd., is pleased that Wall Street is taking the problem seriously, "which puts to rest the whole notion that this problem is made up of hype and exaggeration," he said.
Canadian stock exchanges are busy examining their own internal systems for potential problems, but the securities industry here will also be conducting mass testing next spring, in tandem with U.S. firms.
At the Toronto Stock Exchange, the first level of troubleshooting is at the "point to point" level, with its members, and then with data sources and clearing houses, said Adam Conyers, the TSE's vice-president of finance and administration.
Unlike the U.S., however, Canadian firms will be expected to foot the bill themselves as part of their own year 2000 budgets. The SIA expects the tests to cost between US$5.6 million and US$9 million, an expense to be shared among its member firms.
In its report, Merrill Lynch noted most firms are likely to be prepared to meet the millennium. As for any temporary glitches, it likened them to a power blackout, or disruption of an online network -- a bother perhaps, but not a crisis.