[Text only of letters sent from the Commerce Committee Democrats]
The Honorable Arthur Levitt, Jr.
Chairman
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Chairman Levitt:
In recognition of the year 2000 computer problem and the serious adverse consequences that it poses for the nation's securities markets and investors, I wrote to you in December 1996. On June 2, 1997, you transmitted in response the first SEC Staff Report To The Congress On The Readiness Of The U.S. Securities Industry And Public Companies To Meet The Information Processing Challenges Of The Year 2000.
I asked the General Accounting Office (GAO), by a letter dated July 21, 1997, to review your report and recommend ways to improve future reports. That report, SEC Year 2000 Report: Future Reports Could Provide More Detailed Information (GAO/GGD/AIMD-98- 51, March 6, 1998), found that the SEC's report "did not contain the specific, detailed information that Congress will need to assess progress as the year 2000 approaches." Because the year 2000 is less than two years away, GAO also concludes that annual reporting is inadequate and will not provide timely information.
GAO recommends that the SEC include in future Year 2000 status reports to Congress information similar to that required of other federal agencies by OMB. Specifically, SEC reports should include information on:
- the systems critical to the continued functioning of the U.S. securities markets;
- the progress made in moving critical systems through the various phases of achieving Year 2000 compliance;
- the time frames required to complete each phase of the process;
- the efforts necessary to address systems that are behind schedule; and
- the contingency plans for systems that may not be ready in time. GAO also recommends that SEC report such information more frequently, such as quarterly update briefings, to keep Congress informed as the year 2000 approaches.
I agree with GAO's recommendations, and I respectfully request that you implement them and report in June on your progress in doing so. This is a matter of highest priority.
To function properly, the U.S. securities industry and capital markets require timely and accurate flows of electronic information within vast networks of computerized systems. These systems are vulnerable to serious errors or malfunctions as a result of the impending date turnover. "The failure to get it right will affect the integrity of the payment system, financial markets, and the performance of the domestic and global economies," warned William McDonough, president of the Federal Reserve Bank of New York, in a recent speech.
Thank you for your cooperation and attention to this request.
Sincerely,
JOHN D. DINGELL
RANKING MEMBER
cc: The Honorable Tom Bliley
The Honorable Michael Oxley
The Honorable Thomas Manton
Mr. Mike Burnett (GAO)
(Note: Copies of the GAO report can be obtained by phoning the GAO at 202/512-6000.)
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