Securities Commission (SC) Chairman Dato' Dr Mohd Munir Abdul Majid said the SC would require the Kuala Lumpur Stock Exchange (KLSE) to inform all public listed companies to disclose what they have done and what they plan to do, with respect to the Y2K problem, including the cost implications, from June 1998.

He said the disclosure would be either in the annual reports or by other means to be determined by the SC.

"The Commission will be monitoring this and will expose the companies which do not make such disclosure to the public," he said.

He told this to chief executive officers (CEOs) of stockbroking and futures broking firms in two talks on 25 and 26 March for futures brokers at the SC auditorium. The SC Chairman also addressed CEOs of unit trust management companies and asset management companies today. Some 150 CEOs attended the talks at SC.

The series of three half-day talks titled Year 2000 Problem: Ensuring Readiness are second in the series of awareness talks conducted by the SC. Representatives from Permodalan Nasional Berhad, Kuala Lumpur Options and Financial Futures Exchange (KLOFFE) Bhd, Securities Clearing Automated Network Services Sdn Bhd (SCANS) and three consultancy firms gave presentations on the topic.

Dato' Munir warned all the CEOs that those who had not started work might not totally escape the effects, but the impact would be lessened if action was taken immediately.

"The deadline for addressing this issue is real and is immovable," he said.

"Those of you whose organisation is not taking urgent and concrete measures risk not only disruption of application systems but also of business services."

Dato' Munir said there was no short cuts to the problem, and that while the problem might have been caused by programmers looking for "short cuts", the problem was so huge in its potential implications that it cannot be left to the IT managers.

He urged the CEOs in the audience and their senior management to take responsibility of the problem and ensure that it was addressed in a timely and professional manner.

He added that the SC had paid the most attention towards Market Institutions, particularly the Exchanges and Clearing Houses as these institutions run the mission critical market systems, the failure of which could cause the market to fail.

Exchanges and Clearing Houses had been asked to carry out mock runs with all Member Companies to ensure that the system interface programmes and Members' back office systems were ready for the Year 2000.

The KLSE has set several target dates on Y2K readiness for its member companies:
Y2K status report (17 April 1998), Y2K readiness (31 August 1998) and mock runs (September 1998). The KLSE Group and Member Companies are also expected to be Y2K ready by 31 Dec 1998.

"The Commission also has firm plans to require all licensed intermediaries to disclose to the SC, the efforts and actions they have taken to ensure their systems are Year 2000 compliant," he said.

He added that the SC would provide a reporting template to ensure that relevant information would be provided and reports, standardised.

The SC and Bank Negara Malaysia have been put in charge by the Government to assess the problem in the financial services sector.

The Y2K problem or Millennium Bug is essentially the result of money-saving strategy implemented by early information technology (IT) professionals which has now turned into an expensive logistical nightmare. The problem arises because when the majority of today's computer systems were created back in the 1960s, external storage space was costly and data entry was labour-intensive.

Thus, IT professionals sought efficiencies in storing, entering and displaying data by using two-digits to represent the year rather than the full four digits. This was workable until 21st century data are introduced and computer programmes are not able to distinguish dates. The key issue is that most computers have not been programmed to recognise "00" as the next year after 1999. This may result in a number of errors, ranging from miscalculations to computer stoppages and malfunctions.