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Tuesday 30 November 1999 Posted at 0130 hrs IST

World's exchanges hunker down for Y2K

LONDON: The New York Stock Exchange's Web site offers a sobering reminder of the legal and technical havoc that Y2K could wreak, even though the world's biggest bourse says all millennium tests have been successful.

The NYSE begins its millennium section by telling investors how to contact the exchange's lawyer for prelitigation notices, as required under America's Y2K Act to limit damage claims.

Wall Street is, nevertheless, gearing up for what it hopes will be just another session when it kicks off the new millennium.

``Based on what we have done, we expect it to be business as usual for individual investors on January 3rd,'' said Margaret Draper of the US Securities Industry Association, or SIA.

The association represents 98 per cent of the US securities business and has worked on the Y2K issue with US exchanges, and regulators at the US Securities and Exchange Commission.

The SIA and others prefer talking about due diligence and tests when discussing Y2K, and steadfastly avoid guaranteeing that all will be well.

``We have never issued a definition of compliance or seal of approval, but what I can say is that they have all participated in a thorough testing program,'' Draper said.

``The links with overseas have been checked -- we have seen an enormous upswing in preparedness in Europe.''

Bourses and other market participants say testing has been done and have moved to guessing which glitches may crop up.

The Paris-based Federation of International Stock Exchanges (FIBV) said it could not issue a collective clean bill of millennium health as this made some national lawyers nervous.

``We got blocked by a couple of lawyers on that because of the risk of liability,'' said Thomas Krantz, FIBV deputy secretary general. The FIBV represents 54 of the world's top bourses and almost all global stock market capitalization.

``Everything you can do internally has been tested on a stand-alone basis, but exchanges are anything but stand-alone as they depend on so many linkages with other things,'' Krantz said.

January 3 will not just be about getting the exchanges to operate smoothly -- it's also about making sure there are enough market participants to ensure proper share prices, Krantz said. ``Will things work in January? Yes, probably,'' Krantz said. ``Will there be some problems? Probably, but I would imagine only temporary outages.'' (Reuters)

-- Homer Beanfang (Bats@inbellfry.com), November 29, 1999