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To: eleebee who wrote (7072)	12/10/1997 11:13:00 AM
From: E	Respond to of 31646

From Reuters, today: "UK Financial Watchdog Moves on Millennium Risk" LONDON, Dec 10 (Reuters)- Britain's fledgling financial watchdog on Wednesday moved to step up regulatory activity even before it is formally created, stressing in particular problems associated with millennium computer risk. Howard Davies, chairman of the new Financial Services Authority (FSA), told a regulation conference that while financial firms and markets will wish too maintain continuity and quality of service despite potential year 2000 computer problems, it is also a regulatory issue. ''(The year 2000 issue) has implications for investor protection, for the prudential health of businesses, for market integrity and for investor confidence,'' Davies said. He said failure by institutions to prepare adequately for the millennium could leave depositors unable to access their money and assets, could involve non-completion of deals, market disruption, loss or corruption of records and, in extreme cases, business failure. Davies said regulators must take a risk based approach, tracking firms' preparedness and be prepared to intervene to protect investors or market integrity. Davies said that it is FSA's current view that awareness of year 2000 issues is high and that a high proportion of firms have compliance projects well in hand. ''But for many, the task will take time, and be complex and expensive,'' Davies added. ''Not every firm is up to the speed of the good, let alone the best.'' He said firms must have a compliance project in place which has access to adequate resources and reports regularly at board level. A clear timetable should include fully tested systems by the end of 1998. He said the FSA will also be looking at developing a single approach on responsibilities of senior management of financial firms and responses to the issues thrown up European economic and monetary union (EMU). The FSA officially comes into being in the spring of 1998.