COMPANIES URGED TO DISCLOSE YEAR 2000 ACTIONS AND RISK EXPOSURE
INTERNATIONAL CAPITAL MARKETS GROUP URGES PUBLIC COMPANIES DISCLOSE
YEAR 2000 ACTIONS AND RISK EXPOSURE
TORONTO, Nov. 4 /CNW/ - The Board of Governors of the International
Capital Market Group (ICMG) has written a letter to members of the
International Organisation of Securities Commissions (IOSCO) and the
International Federation of Stock Exchanges (FIBV) urging that public
companies be required to disclose actions they are taking to deal with the
''Year 2000 Problem.'' The disclosure called for would include risks faced
should the company, or those on whom it is dependent, such as suppliers,
customers, creditors and debtors, not complete the systems modifications
necessary to overcome the inability of many computer programmes to recognize
dates or time periods following December 31, 1999.
The ICMG is a cooperative venture of the International Bar Association's
Section on Business Law, the International Federation of Accountants and the
International Federation of Stock Exchanges. Each of these organisations
carries on its activities in the private sector and has an interest in the
regulation, well being and development of the world's capital markets.
ATTACHMENT: Letter to IOSCO and FIBV members
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INTERNATIONAL CAPITAL MARKETS
GROUP
A cooperative venture of
the International Federation of Stock Exchanges, the International Bar
Association's Section on Business Law and the International Federation of
Accountants
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3 November 1997 Stockholm, Sweden
To:
Chairmen, IOSCO Members
Chief Executives, FIBV Members
cc:
Chief Executives, IFAC Member Bodies
Designated Members of IBA-SBL
Dear Sir,
Re: Year 2000 Problem
I write, as its Chairman, on behalf of the Board of Governors of the
International Capital Markets Group which is constituted of the Federation
Internationale des Bourses de Valeurs, the International Bar Association -
Section on Business Law and the International Federation of Accountants.
I draw to your attention our continuing concern as to the potential
impact of the ''Year 2000 Bomb'' on finance, industry, commerce, government
and society at large unless the gravity of the issue is appreciated, its
different facets recognized and the requisite actions taken on a timely and
comprehensive basis.
In the first place, we sense that, despite the substantial publicity the
issue has received in the national and international media, there are still
far too many enterprises lacking the impetus to ensure that the significant
technology challenges involved will be met in time within their own
organizations.
Secondly, in light of the extensive interdependencies to which firms
today are subject, it is not sufficient merely to have put one's own house in
order. All the work one does may be for nought, in terms of avoiding the
fall-out from the Year 2000 Bomb, if affiliates, suppliers and customers have
not, likewise, had the necessary review and modifications performed. This
dimension of the problem seems insufficiently understood.
Finally, the supply of qualified programmers may not be adequate to the
demand, especially if there is an eleventh hour crush. Hence, those who have
not begun on the readiness process may find themselves unable to complete it
before 31 December 1999. Unfortunately, the latter is not a date that can be
deferred. And because of the web of interdependencies, procrastinators
imperil, not just themselves, but the proactive as well.
Accordingly, given the serious consequences for global capital markets of
any failure of systems on -- or even before -- 1 January 2000, we believe it
appropriate that public companies be required to disclose regularly -- in
interim statements and annual reports -- the actions being taken to deal with
the Year 2000 problem and the risks which the company might face should it, or
those on whom it is dependent, not have systems modification completed in good
time. Indeed, we are of the view that principles of corporate governance and
the obligation to disclose exceptional risks and costs could, in any case,
compel such disclosure. Notwithstanding this view, we propose that a positive,
express, explicit and universal requirement that listed companies make such
disclosure should be adopted by all stock exchanges. We call on you to assist
in having this objective realized.
Earlier this year, in a communique on Year 2000, IOSCO urged, ''all...
members and market participants in their jurisdictions to take all appropriate
and necessary action to address this critical issue.'' We join in this
exhortation and recommend the measure we have proposed.
(signed)
Bengt Ryden
Chairman
Board of Governors
International Capital Markets Group
Chief Executive
Stockholm Stock Exchange
ICMG
Dedicated to 'Stimulating the Global Debate'
on important issues involved in further development
of the world's capital markets |
