Communications test run between SC and regulatees successful
A test run was successfully carried out between the SC Y2K Command Centre (YCC) and the response centres of the SC's regulatees to ensure effective and smooth communication between SC and its constituents during the rollover period. The test was carried out for one full day and involved more than 100 market institutions and intermediaries.
The YCC was established as a precautionary measure for effective event management during the rollover period. The YCC will be fully operational with effect from 30 December 1999 to 4 January 2000.
High-level discussions between SC and the heads of market institutions have also been held to finalise communication flows and the decision-making process during the rollover period. This is to ensure that potential problems can be addressed efficiently and effectively.
The SC's preparations to face the ramifications of the Y2K issue had begun since 1997. In this regard, measures have already been taken to ensure that the SC, capital market institutions and intermediaries are Y2K ready.
Readiness of Market Institutions
Market institutions, namely, the exchanges, clearing houses, central depository and issuing houses are all Y2K ready. These institutions have completed remediation and rigorous internal testing, end-to-end industry testing and have in place contingency plans.
In addition to the individual testing of each market institution systems, several rounds of end-to-end industry tests between the market institutions and their member companies as well as service providers, have been carried out successfully, proving Y2K readiness in the industry.
Readiness of Market Intermediaries
A large majority of market intermediaries, namely, the stockbroking companies, futures brokers, asset management companies and unit trust management companies have completed their Y2K programme and are ready to face the millennium change.
Nonetheless, there are a handful of companies that are unlikely to complete Y2K remediation in time due to their financial constraints. These companies have been placed under business restrictions by the authorities. Y2K readiness would be one of several conditions assessed before these restrictions are lifted.
Capital Market Y2K Contingency Plan
Besides ensuring the readiness of market participants, the SC has in place a Capital Market Y2K Contingency Plan, which identifies contingency measures for possible situations that could lead to market-wide disruption. The SC views having well-developed and well-tested contingency plans as an important and integral aspect of preparations to ensure a smooth rollover to the Year 2000. The development of thorough contingency plans demonstrates prudent planning and does not indicate SC's expectation that major disruptions will occur.
31 December as non-trading and non-settlement day
As another precautionary measure, the SC has also declared that Friday, 31 December 1999 will be a non-trading and non-settlement day. This is consistent with the decision of Bank Negara Malaysia (BNM) to make the same day, a non-transaction day for the banking and insurance sector. As the stockmarket uses the service of the banking sector for the settlement of traded securities, the tandem decisions by BNM and the SC would prevent any unnecessary hitches during the rollover. Trading will commence again on Monday, 3 January 2000.
Various types of communication programmes have been planned by the SC for the pre, during and post rollover period. This is to ensure the public is kept informed of developments during the critical periods so as to maintain public confidence in the Malaysian capital market.
