SEC Year 2000 Report

The Securities and Exchange Commission's (SEC) June 1997 report provides an overview of the efforts that SEC and various industry participants have made to address the Year 2000 issue, but it lacks the specific, detailed information that Congress will need to assess progress as the millennium approaches. The Office of Management and Budget's reporting format offers guidance on the type of detailed information that SEC might provide in future reports. This information includes the systems considered critical to the continued functioning of the U.S. securities markets, the progress made in making these systems Year 2000 compliant, the time frames required to complete each phase, the efforts required to address systems that are behind schedule, and the contingency plans for systems that may not be ready in time. As the year 2000 approaches and less time is available to make adjustments, SEC's yearly progress updates may be too infrequent for congressional needs.

GAO noted that: (1) SEC's first report in June 1997 provided an overview of the efforts that SEC and various industry participants had made to address year 2000 issues, but did not contain the specific, detailed information that Congress will need to assess progress as the year 2000 approaches; (2) according to an agency official, SEC had collected more detailed information from some market participants, such as SROs; (3) the official said that SEC did not include this information in the report because SEC had been focused on assessing the extent to which market participants were aware of the year 2000 problem and had begun taking steps to address it; (4) the Office of Management and Budget's (OMB) reporting format offers guidance on the type of detailed information SEC might provide Congress in future reports; (5) such information includes: (a) the systems considered critical to the continued functioning of the U.S. securities markets; (b) the progress made in moving these systems through the various phases of achieving year 2000 compliance; (c) the timeframes required to complete each phase; (d) the efforts necessary to address systems that are behind schedule; and (e) the contingency plans for systems that may not be ready in time; and (6) also, as the year 2000 approaches and less time to make adjustments is available, SEC's yearly progress updates may be too infrequent for congressional needs.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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