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  • Year 2000 Update (March)

    March 1999

    Deadline For Completion Of Form BD-Y2K Is Near

    The National Association of Securities Dealers, Inc. (NASD®) recently mailed a Form BD-Y2K package to each member firm for completion by April 30, 1999.

    The recent amendments to Securities and Exchange Commission (SEC) Rule 17a-5 require all NASD members with minimum net capital requirements of $5,000 or greater as of March 15, 1999, to file the Form BD-Y2K report with the SEC and the firm's designated examining authority (DEA). Broker/dealers with minimum net capital requirements of $5,000 or greater as of March 15, 1999, are required to file Part I of Form BD-Y2K by April 30, 1999.

    Broker/dealers with minimum net capital requirements of $100,000 or greater are required to file, also by April 30, 1999, the Part II narrative and Part III-an independent public accountant's report—in addition to Part I. Part III of the Form must be completed by an independent public accountant; to complete this process, the independent public accountant must review completed Parts I and II. For background on constructing the independent public accountant's report, visit the American Institute of Certified Public Accountants Web Site (www.aicpa.org).

    If you did not get a copy of this package, please call the Year 2000 Program Office at (888) 227-1330 or visit the Year 2000 Web Pages on the NASDR and NASD Web Sites (www.nasdr.com and www.nasd.com, respectively).

    See the following page for helpful hints in preparing the Form BD-Y2K.

    SEC Readiness Information

    The SEC has provided a searchable database on the SEC Web Site (www.sec.gov), which features information from Year 2000 required reports from securities firms and other constituents. Currently, the database includes more than 13,000 reports that describe the following for each firm included in the database:

    • state of Year 2000 readiness


    • costs to address the Year 2000 problem


    • Year 2000 risks


    • progress in developing contingency plans

    1999 Form BD-Y2K Best Practices And Helpful Hints

    Firms should keep in mind the following points when completing and submitting the Form BD-Y2K:

    1) Each broker/dealer firm must file separately.
    2) Forms must be signed by those authorized to sign FOCUS reports. Unsigned and/or incomplete forms will not be accepted; and, therefore, will not be considered filed by the deadline.
    3) The CRD number must be that of the member firm responding.
    4) The address must be the firm's principal place of business and not a Post Office Box number.
    5) Forms submitted to the DEA must be preserved in accordance with SEC Rules 17a-3 and 4 (for a period of three years).
    6) Each firm must fill out the proper filing and identification information at the top of each page.
    7) The original report and two copies must be mailed to the Securities and Exchange Commission, 450 Fifth Street, N.W., Mail Stop A-2, Washington, D.C. 20549.
    8) One copy must be mailed to Lyn Kelly, Year 2000 Program Office, NASD Year 2000 Program Office,15201 Diamondback Drive, Rockville, MD 20850, ATTN: Report-BD-Y2K.
    9) Firms required to file Parts I, II, and III must file these parts together for receipt at the SEC and DEA by close of business on April 30, 1999. Incomplete report submissions will not be accepted, and reports will not be considered "filed" unless all applicable parts are received together with the signed cover sheet (Appendix A) by the April 30th due date.
    10) All Parts of Form BD-Y2K will be made available to the public.
    11) Each firm should send the Form BD-Y2K in as early as possible (your firm may want to use a form of delivery that permits a receipt to be kept for records).
    12) Form BD-Y2K may not be filed by fax.
    13) The Form BD-Y2K should represent each firm's Year 2000 progress, not that of a separate clearing firm or service bureau.
    14) If the firm's DEA is a self-regulatory organization (SRO) other than the NASD, the report should be sent to that DEA, not the NASD.

    More Information/Questions

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

    Year 2000 Education And Events

    New York Workshop

    The NASD Year 2000 Program Office will host a workshop on contingency planning at the Marriott World Trade Center in New York City on April 5, 1999. Please note that registration is required; to register, call (888) 227-1330.

    Virtual Workshops

    The NASD Year 2000 Program Office is continuing to offer Virtual Workshops—conference call-in sessions. The NASD strongly encourages registration, but it is not required. To register, call (888) 567-0578, 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 next page for a list of these specifics organized by date of session, as well as a brief summary of issues to be discussed.

    See next page for Virtual Workshops.

    Year 2000 Education And Events

    Virtual Workshops

    March 17   BD-Y2K 1999 Frequently Asked Questions and Answers

    Password: Questions

    Conf #: 2920202

    Issues to be covered:

    • Frequently asked questions about the Form BD-Y2K 1999 in comparison to the Form BD-Y2K 1998


    • Helpful hints in the completion of Part 2 and how your DEA will review your SOP

    March 23   Year 2000 Overview/Business Continuity Strategies

    Password: Strategies

    Conf #: 2920237

    Issues to be covered:

    • Developing or updating a disaster and contingency plan


    • Documenting plans


    • Business impact analysis


    • Recovering mission-critical systems


    • Validating firms' business continuity strategies

    April 6   Investor Communication "Best Practices"

    Password: Communication

    Conf #: 3111435

    Issues to be covered:

    • Frequent problems


    • Disclosure issues


    • Best practices


    • Questions & Answers

    April 13   Internal Testing

    Password: Testing

    Conf #: 3112914

    Issues to be covered:

    • What kinds of firms need to test


    • Testing best practices


    • Potential testing - contingency planning


    • Questions & Answers

    April 20   Contingency Planning

    Password: Contingency

    Conf #: 3112165

    Issues to be covered:

    • Step-by-step guide


    • Timeline/impact if no contingency - a case study


    • External/internal contingency planning


    • Global view


    • Questions & Answers

    April 27   Utilities and Critical Services

    Password: Services

    Conf #: 3111865

    Issues to be covered:

    • State of utilities and recent guidelines


    • Other critical services


    • How these critical services affect broker/dealer's preparedness


    • Best practices in dealing with uncertainty


    • Questions & Answers

    May 6   Audit, Agreed Upon Procedures, and Examination

    Password: Audit

    Conf #: 3111848

    Issues to be covered:

    • Differences between audit and agreed upon procedures


    • Purpose of examination


    • Records retention and documentation


    • Sources of information to retain (e-mails, letters, etc.)


    • Questions & Answers

    May 13   Investor Communication "Best Practices"

    Password: Communication

    Conf #: 3111736

    Issues to be covered:

    • Frequent problems


    • Disclosure issues


    • Best practices


    • Questions & Answers

    May 20   Utilities and Critical Services

    Password: Services

    Conf #: 3113760

    Issues to be covered:

    • State of utilities and recent guidelines


    • Other critical services


    • How these critical services affect broker/dealer's preparedness


    • Best practices in dealing with uncertainty


    • Questions & Answers

    1999 NASD Regulation Spring Securities Conference

    As mentioned in the last issue of Notices to Members, Year 2000 issues will be featured as part of the 1999 NASD Regulation annual Spring Securities Conference to be held in New Orleans on May 20-21. A conference brochure has been mailed to NASD members and is available on the NASD Regulation Web Site at www.nasdr.com.

    NASD Year 2000 Event Calendar

    Topic Location Date Time
    BD-Y2K 1999 Frequently Asked Questions and Answers Virtual March 17 11:00 a.m., ET
    Y2K Overview/Business Continuity Strategies Virtual March 23 11:00 a.m., ET
    Contingency Planning New York April 5 9:00 a.m. - 11:00 a.m.
    Contingency Planning Investor Communication New York April 5 1:30 p.m. - 4:00 p.m.
    "Best Practices" Virtual April 6 11:00 a.m., ET
    Internal Testing Virtual April 13 11:00 a.m., ET
    Contingency Planning Virtual April 20 11:00 a.m., ET
    Utilities and Critical Services Virtual April 27 11:00 a.m., ET
    Audit, Agreed Upon Procedures, and Examination Virtual May 6 11:00 a.m., ET
    Investor Communication "Best Practices" Virtual May 13 11:00 a.m., ET
    NASD Regulation Spring Securities Conference New Orleans May 20-21  
    Utilities and Critical Services Virtual May 20 11:00 a.m., ET