The SC has made it a requirement for all market institutions and intermediaries to have in place well developed and well tested contingency plans to address problems during the roll-over period to the next millennium.

Contingency planning of the financial services sector is one of the focus in the Y2K Booklet - Malaysian Financial Sector, Status Update and Continuity Planning, which was launched by Bank Negara Malaysia Governor Tan Sri Ali Abul Hassan Sulaiman and Securities Commission Chairman Encik Ali Abdul Kadir today.

The joint publication by the Securities Commission (SC) and Bank Negara Malaysia (BNM) covers the initiatives of both regulators in addressing the Y2K issue in the Malaysian financial sector and the state of readiness of the critical market infrastructures.

The SC views contingency planning as an important and integral aspect of Y2K preparation in ensuring a smooth roll-over to the Year 2000. With the millennium change only five months away, SC has stressed on the need for every business entity to continue to tackle unforeseen problems that may arise no matter how well prepared they think they are. The vulnerability of our systems - software, hardware, intra- and inter- networks - is compounded by the uncertainty of the extent of the problem and the consequent complications it may bring irrespective of the level of preparedness.

The SC stresses that an integral part of coping with Year 2000 problems will be for market participants to have well-developed and well-tested contingency plans that will provide a method for responding to the loss or degradation of essential services in the automated system, and maintaining essential functions for the operation of the market and thereby maintaining the confidence of investors and market participants.

The SC is aggressively monitoring the progress of its constituents in their preparation. Efforts in this direction which began in 1997 have been intensified over the past year or so.

Market institutions, i.e. the exchanges, clearing houses and central depository, have implemented Year 2000 ready systems, having completed remediation and rigorous internal and external testing, and are now concentrating on additional testing and contingency planning.

Market intermediaries, i.e. the broking firms, unit trust management companies and asset management companies, have been making good progress in their Year 2000 compliance work in the past few months. Most of these companies have already completed their Year 2000 programme and are ready to face the New Year, while a few are still finishing up on testing and implementation and are awaiting confirmation of readiness from external parties on which they depend on.

Apart from efforts at the national level, the SC has also been involved on the international front to address this problem through its involvement in the Joint Year 2000 Council.

The Y2K status report is timely to inform investors of the measures taken by the SC to address the Year 2000 problem in the capital market. This awareness is necessary to facilitate investors' confidence in the market. The information contained in the report will provide readers with a better understanding of what the financial services sector in Malaysia has done and plans to do to enhance its readiness for Year 2000. Like all other economies in the world, Malaysia is keen to share with the international community its experience in addressing the problem and ensuring timely readiness.

One thousand copies of the report will be printed for the SC. Copies will be distributed to members of the International Organisation of Securities Commissions (IOSCO) as well as the IOSCO secretariat, members of the Joint Year 2000 Council, all Malaysian capital market institutions and intermediaries, and the associations/federations of industry groups.