Wall Street's top firms passed the first round of testing organized to ferret out millennium bugs with very few difficulties, Security Industry Association officials said Monday.
The SIA oversaw the complicated round of testing with the 28 of the Street's largest firms.
The two-week tests, conducted over a separate system designed to simulate a Year 2000 environment, "confirmed that firms were able to input trades... and send them to the appropriate market for execution, confirmation and clearance," the SIA said.
Together, the firms contribute about 50 percent of daily trading volumes on the main U.S. exchanges.
"The industry infrastructure which supports the exchanges throughout the U.S., the clearing corporations and the depositories that we rely on a day-to-day basis are, in fact, Y2K compliant or they're 90-percent of the way there," Arthur Thomas, director of Global Operations for Merrill Lynch, told CBS.MarketWatch.com.
The SIA didn't bring in foreign firms or markets, a source of concern to many U.S. analysts who have more worries about Y2K readiness overseas. The U.S. financial industry is largely believed to be in the lead on Y2K in the U.S. overall.
"What happens if the lights don't go on that day? What happens if the fire alarms don't work? Will the fire department let us occupy the premises?" asks Ed Post, a systems integration analyst at James Martin & Co. consultants.
The SIA isn't done on the testing. Don Kittell, executive vice president, said that the mock trading scripts are being refined for the next round of testing, culminating in March 1999.
The problems SIA testers uncovered - including computers not recognizing valid test symbols or trades being sent to the wrong exchange - were the results of testing prerequisites, the SIA said.
"These all have been, or are being corrected," the SIA said.
Fears that computers will misinterpret the last two digits of 2000 as 1900 instead of 2000 have sparked a huge industry for computer programmers rushing to fix the problem. Some estimates put the potential cost of the problem in the hundreds of billions of dollars.
By Stacey Tisdale