The first major series of tests on Year 2000 compliance in the securities and futures sector has been completed with good results.
Member firms, participants, or designated banks of the Stock Exchange of Hong Kong, Hong Kong Futures Exchange, Hongkong Clearing, Stock Exchange Options Clearing House, and the HKFE Clearing Corporation took part in the street-wide tests held this month. The Securities and Futures Commission was responsible for co-ordination.
The objective of street-wide tests is to provide facilities for member firms and participants to verify the Year 2000 compliance readiness status of their business operations and back office systems, including hardware and software, that interface with the exchanges and clearing houses.
The tests were carried out on 16, 17, 23 and 24 January 1999, testing respectively the dates of century rollover of 30, 31 December 1999, 4 January 2000, and the leap year day of 29 February 2000.
Two more rounds of tests have been scheduled for March and June 1999. Those who did not take part in this round of tests and whose testing results are identified as unsatisfactory must participate in future sessions.
Initial assessments by the exchanges and clearing houses on the major shared systems and their interface with member firms and participants showed encouraging testing results with no major incidents. Some minor incidents not related to Year 2000 compliance were identified and quickly resolved during the test.
As to the compliance status of member firms and participants, the exchanges and clearing houses are still awaiting the formal submissions by the individual firms and participants. Full test results will be analysed and further reports will be submitted by the exchanges and clearing houses to the SFC by early March 1999.
The SFC, the exchanges, and clearing houses all regard the Year 2000 issue a very serious matter. Regulatory measures and disciplinary actions may be taken against registrants, member firms or participants who fail to ensure their systems are Year 2000 compliant by the key milestones as set by the SFC, the exchanges and clearing houses.
The following summarises the major test information: