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Year 2000 Update (September)

Year 2000 Countdown

As 1999 winds down, Year 2000 issues will receive increased focus as public attention to these issues increase and companies in virtually every industry accelerate efforts to meet Year 2000 compliance deadlines. During this critical period, the securities industry will heighten its focus on regulatory compliance, investor communication, Year 2000 testing, and contingency planning. All broker/dealers should be aware of the Year 2000-related deadlines and events noted below. Following these specific dates and events are general guidelines to help firms complete their compliance efforts.1

1 Following these guidelines by themselves will not guarantee Year 2000 compliance.

Securities Industry is Ready for Year 2000! Media Event (9/7) NASD Year 2000 Readiness Initiative Initial Submission (9/30) SEC Rule Final Compliance Deadline (11/15)  
SEPTEMBER OCTOBER NOVEMBER DECEMBER
SEC Rule 15b7-3T Compliance Deadline (8/31) Last date for Point-to-Point testing with the NASD (9/30) SIA Transition Conference (11/12) JANUARY 1, 2000

September 1999

  • August 31, 1999: This was the compliance deadline for the Securities and Exchange Commission's (SEC) Operational Capability Rule for broker/dealers with internally developed or maintained missioncritical systems. All affected firms were required to comply with the provisions of the Rule by this date or submit to the SEC certified plans ensuring compliance by November 15, 1999. See www.nasd.com and www.nasdr.com for more information on this Rule.


  • September 7, 1999: Officials from the SEC, National Association of Securities Dealers, Inc. (NASD®), Securities Industry Association (SIA), Investment Company Institute (ICI), and President's Council on Year 2000 Conversion will participate in a Securities Industry Media Event, which will highlight industry preparedness and investor communication. The securities industry's Year 2000 Investor Kit can be obtained by accessing the NASD and NASD Regulation Web Sites (www.nasd.com and www.nasdr.com), or by calling the Year 2000 Program Office at (888) 227-1330. Firms can also purchase additional copies of the Kit for their customers at the cost of $28.75 in packages of 25 per order. View the Kit at: www.nasdr.com/3600_inv_kit.htm.


  • September 30, 1999: Certification letters for the NASD's Year 2000 Readiness Program should be submitted by this date. Letters received on or after September 30 will be posted to the NASD and NASD Regulation Web Sites periodically. This is also the last date for point-to-point testing with the NASD. See the NASD and NASDR Web Sites (www.nasd.com; www.nasdr.com) for more information.


  • November 12, 1999: The SIA Transition Conference, the SIA's final conference of the year, will detail the industry's Year 2000 plans over the course of the weekend of December 31, 1999-January 3, 2000. It will provide information about contingency planning as well as interaction with key communication and coordination center personnel, regulators, and the industry over the transition weekend.


  • November 15, 1999: This is the final compliance date for the SEC Operational Capability Rule. Applicable firms should have completed all requirements outlined in the Rule.

Milestone Guidelines

In addition to the specified dates listed above, firms should follow the activity guidelines below. These general activities should occur in the timeframe shown, and may vary depending on the size and complexity of the broker/dealer.

September 1999

  • As outlined in the SEC Operational Capability Rule, firms should have completed all assessment, remediation, and testing processes of mission-critical systems by August 31, 1999. In addition, each firm should:


  • Communicate with investors about Year 2000 readiness efforts by submitting a voluntary Year 2000 readiness letter. Refer to www.nasd.com or www.nasdr.com for further information about this NASD Year 2000 Readiness Initiative.


  • Complete point-to-point testing with the Nasdaq® and NASD Regulation® applications (To schedule testing, call the NASD Year 2000 Program Office at (888) 227-1330).


  • Be prepared to submit the third-quarter FOCUS filings using the new Year 2000 ready version of Web-Based FOCUS.


  • Submit to the SEC a plan demonstrating how your firm will become compliant by November 31, 1999, if your firm was not able to confirm readiness as of the August 31, 1999 date specified in the SEC Operational Capability Rule.


  • Focus on investor communication about the securities industry's readiness and your firm's readiness.

October 1999

During October, firms should be finalizing Year 2000 project activities and should:

  • Complete and fully test Year 2000 contingency plans to ensure functionality.


  • Activate freeze dates for new software or hardware as applicable to prevent Year 2000 issues with newly implemented systems.


  • Activate third-party contingency arrangements for any vendors or suppliers failing to show acceptable Year 2000 progress or readiness.


  • Focus on investor communication about the securities industry's readiness and your firm's readiness.

November 1999

In November, firms should:

  • Focus on investor communication about the securities industry's readiness and your firm's readiness.


  • Complete legal reviews of Year 2000 plans and activities, including Year 2000 warranty information in contracts.

December 1999

December should be reserved for event management and final Year 2000 preparations. These should include:

  • Continued focus on investor communication.


  • Staffing and confirming activities over the course of the transition period, including required reporting of market maker and clearing firms to the NASD.

The Year 2000

After the new year arrives firms should begin focusing on:

  • Leap year considerations to ensure continued success.


  • Decimalization plans.

In addition to the events noted above, refer to the following Year 2000 Education and Events schedule for more information on Virtual Workshops to be conducted by the NASD Year 2000 Program Office.

Year 2000 Education And Events

The NASD Year 2000 Program Office is continuing to offer Virtual Workshops—conference call-in sessions. The NASD strongly encourages registration for these sessions by calling (888) 567-0578. After placing the call, listen to the greeting, and provide the following information when prompted: firm name, Broker/Dealer #, and workshop date. On the day of the session, call (800) 857-7323 and indicate the password and confirmation number provided for the specific workshop. See below for a list of these specific workshops organized by date of session, as well as a brief summary of the issues to be discussed.

September 14—Certification of Year 2000 Compliance and SEC Rule 15b7-3T

Password: Certification

Conf. #: 3117560

Issues to be covered:

  • Certification and the Year 2000 issue


  • Latest developments in certification


  • Best practices for all types of firms

Sept. 21—Peer Review of Best Practices III

Password: Practices

Conf. #: 3117592

Issues to be covered:

  • A year review of the biggest challenges faced by broker/dealers of all sizes


  • Summary of the top 10 best practices to managing the Year 2000 issue

October 12—State of Utilities and Other Critical Services

Password: Utilities

Conf. #: 3117608

Issues to be covered:

  • State of utilities and recent guidelines


  • Other services


  • Possible impact on broker/dealers


  • Best practices in dealing with uncertainty

October 19—State of the Securities Industry

Password: Industry

Conf. #: 3117632

Issues to be covered:

  • Industry summary and overview


  • A look at clearing firms


  • A look at Market Makers


  • A look at introducing firms


  • In-depth look at where your firm should be in achieving Year 2000 readiness

October 26—Legal Review for Broker/Dealers

Password: Review

Conf. #: 3117647

Issues to be covered:

  • A review of legal issues for 1998 and 1999


  • Current broker/dealer trends reviewed


  • Checklist of what your firm may need to do with the little time remaining

November 2—Day Zero Preparations

Password: Day Zero

Conf. #: 3117656

Issues to be covered:

  • Day zero scenarios-the new year


  • Broker/dealer strategic scenarios


  • Helpful hints on day zero

November 10—Contingency Planning and Reporting Requirements

Password: Trends

Conf. #: 3117664

Issues to be covered:

  • Developments in contingency planning trends


  • Step-by-step guide to completing mandatory reporting to the SROs during the transition timeframes


  • Global view

November 17—Risk Management

Password: Risk

Conf. #: 3117677

Issues to be covered:

  • Key principles in risk management


  • What the NASD is doing to manage risk


  • What clearing firms and introducing firms can do


  • Review of seven areas that can affect your business operations

December 9—Day Zero Preparations

Password: Day Zero

Conf. #: 3117664

Issues to be covered:

  • Day zero scenarios-the new year


  • Broker/dealer strategic scenarios


  • Helpful hints on day zero

December 14—Beyond Year 2000

Password: Beyond

Conf. #: 3117699

Issues to be covered:

  • The Millennium-Doing business summary


  • Resources


  • Record retention and maintenance issues

NASD Year 2000 Event Calendar

Topic Location Date Time
Certification of Year 2000 Compliance and SEC Rule 15b7-3T Virtual Sept. 14 11:00 a.m., ET
Peer Review of Best Practices III Virtual Sept. 21 11:00 a.m., ET
State of Utilities and Other Critical Services Virtual Oct. 12 11:00 a.m., ET
State of the Securities Industry Virtual Oct. 19 11:00 a.m., ET
Legal Review for Broker/Dealers Virtual Oct. 26 11:00 a.m., ET
Day Zero Preparations Virtual Nov. 2 11:00 a.m., ET
Contingency Planning and Reporting Requirements Virtual Nov. 10 11:00 a.m., ET
Risk Management Virtual Nov. 17 11:00 a.m., ET
Day Zero Preparations Virtual Dec. 9 11:00 a.m., ET
Beyond Year 2000 Virtual Dec. 14 11:00 a.m., ET

More Information/Questions

NASD Year 2000 Program Office
e-mail: y2k@nasd.com
phone: (888) 227-1330

or visit the...

Year 2000 Web Pages:

www.nasd.com

or

www.nasdr.com


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