Early results looked good in a
Wall Street test for signs of the "millennium bug," which some
experts believe threatens to crash computers around the world on
Jan. 1, 2000, due to a software glitch.
The Securities Industry Association (SIA), the trade group
organizing the test, said results from Saturday's dry run were
"better than expected," but the real test is yet to come.
The year-2000 or Y2K problem threatens to crash
computers on New Year's Day because a programming defect may
cause computers to read the year 2000 as 1900.
World financial markets have become so closely interconnected
that a blackout in one large area or firm could spell disaster
around the globe when markets open for trading in 2000.
More than 400 brokerages are checking their computer systems,
aiming to ensure that the hive of computers that link up Wall
Street will perform normally on Monday, Jan. 3, 2000.
On each testing day, the computers are fooled into thinking
it is a date near the millennium. For instance, on Saturday, the
computers were set to act as though it were Dec. 29, 1999.
In the next test, on March 13, they will be set to Dec. 30.
The test schedule, which runs for five more weekends, will
simulate the year 2000 on April 10.
More than 170,000 mock trades went flying through Wall Street
computer systems on Saturday, the SIA said, with a light volume
of calls and routine problems coming into command center,
staffed by SIA workers and "coaches" from the auditing firm
"The first day's success is important because it
demonstrates that the participating firms have done their
homework," said Donald Kittell, SIA executive vice president.
The test went beyond stocks, also checking systems for
trading options, mutual funds, corporate bonds, municipal bonds,
mortgage-backed securities, government securities and money
The SIA first ran the test last July among some of its top
firms, U.S. stock markets, and clearing and settlement
companies. That "dress rehearsal" went well, but now the test
must scan systems that are likely to have far more faults, since
small firms have less money to spend heading off potential Y2K
The securities industry as a whole is estimated to be
spending up to $6 billion to ensure computer systems do not
crash on New Year's Day.
Kittell has said the test will be a good model as the
industry readies for "decimalization" next year when stock
prices will be quoted in dollars and cents instead of in
sixteenths of a point.
He said it will also help prepare for "T+1" trade plus
one day for settlement. Currently, stock trades must be settled
in three days ("T+3"), but the industry is moving to close the
gap between trade and settlement.