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November 4, 1997updated 03 Sep 2016 7:45pm

SEC RINGS ALARM BELL OVER YEAR 2000 BUG

By CBR Staff Writer

The head of the Securities and Exchange Commission, Arthur Levitt, has warned some 10,000 securities firms in the US that their highest priority must be dealing with the Y2K bug. The news comes on the heels of a warning from consulting firm Gartner Group to attendees of a European IT managers’ conference that some 30% of firms worldwide will likely be exposed to the consequences of the Year 2000 problem, with only 5% being fully prepared for whatever awaits us at the stroke of midnight, December 31st, 1999. Levitt – Wall Street’s most important regulator – has written to companies telling them of his concerns that the security industry may be insufficiently prepared for the end of the century challenge to computer systems, some of which may be subject to run time errors given their inability to realize 00 means 2000, not 1900. Levitt wants companies to have completed the necessary work for cleansing code of all such non-compliant date formats by the end of next year, so that there can be industry-wide test runs of modified systems for all of 1999. Such a project would almost certainly derail moves by US markets to shift from fraction to decimal based trading. Further, Levitt wants to be kept informed, with regulatory authorities kept apprised of progress and any problems immediately notified. The seriousness of the situation is even further underlined by predictions by Gartner, at its Symposium Itxpo97 in Cannes, that Europe will find itself as much as six to nine months behind North America in racing to deal with the problem. Analyst Nick Jones believes by the end of 1999 less than 70% of affected organizations will be Year 2000 compliant at the mission critical system level, with only 5% likely to be in the safety zone by the end of this calendar year. He also noted that the problem may well strike in unexpected areas, given that there are some 3.3 billion embedded micro-controllers in use, in applications ranging from smart cards to microwaves to elevators to air conditioners to automated factory operations. Jones and Gartner worry some 50 million may show Year 2000 anomalies in just over three years time.

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