Contact: James D. Spellman, (202) 296-9410, [email protected]
Margaret Draper, (212) 618-0531, [email protected]
MORE THAN 400 SECURITIES FIRMS TO PARTICIPATE IN FIRST-EVER INDUSTRYWIDE YEAR 2000 TEST
Trading And Settlement Cycles Of Nine Products To Be Tested Over Six Weekends
New York, NY, January 14 -- More than 400 securities firms will work with the securities markets and utilities to test, starting in early March, a full trading and settlement cycle using computers converted to simulate five days between 1999's end and 2000's beginning.
"The industrywide test is another milestone in the industry's extensive efforts to prepare for the year 2000," said Donald D. Kittell, executive vice president of the Securities Industry Association, which is coordinating the test. "This will be the first time that securities firms will have the opportunity to test their internal computers' interaction with both the stock markets and the clearing and settlement utilities. Further, it will be the first chance to test year-2000 preparedness for the entire transaction cycle for nine different financial products."
Trading on March 6 will simulate December 29, 1999; March 13 for December 30; March 27 for December 31; and April 10 for January 3, 2000. Testing for mutual funds will continue on April 17 (when January 4 will be simulated) and testing for options expiration will continue on April 24 (when January 22 will be simulated).
Equities, options, unit investment trusts, mutual funds, corporate bonds, municipal bonds, mortgage-backed securities, governments, and money market funds will be tested. Industry volunteers have prepared scripts for the simulations that incorporate characteristics unique to each product.
Similar testing procedures were used for a dress rehearsal of the test (the "beta" test) last summer, in which 28 securities firms participated along with the markets and utilities. "We incorporated suggestions from the firms participating in the trial run of the test," said Kittell. "We learned a great deal and used this information to prepare the industrywide test."
Results of the industrywide test will be released in late April.
"The magnitude and complexity of the industrywide test is unlike anything the securities industry has tackled before," said Kittell. "It will serve as a useful model for future industrywide tests that will be needed as the industry prepares for decimal-pricing of securities and, eventually, T+1 settlement."
The Securities Industry Association brings together the shared interests of more than 775 securities firms to accomplish common goals. SIA member-firms (including investment banks, broker-dealers, and mutual fund companies) are active in all U.S. and foreign markets and in all phases of corporate and public finance. The U.S. securities industry manages the accounts of more than 50-million investors directly and tens of millions of investors indirectly through corporate, thrift, and pension plans. The industry generates approximately $270 billion of revenues yearly in the U.S. economy and employs more than 380,000 individuals.
(More information about the SIA is available on its home page: http://www.sia.com.)
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