Towards the millennium - The FSA and the Year 2000

Michael Foot, Managing Director and Head of Financial Supervision at the FSA, said:

"Very significant progress has been made so far in 1999 and there is considerable confidence in the readiness of the UK financial services industry. But there is still much for the regulators and the industry to do over the next five months. There must be no let-up now."

He added:

"It is imperative that in this final phase the top management of every financial institution continues to take responsibility for key Year 2000 issues. In particular, they must ensure that their own institution:

completes effectively and in good time its Year 2000 programme; has effective change control arrangements to ensure that readiness is not prejudiced by systems changes; has a communication strategy which will meet the needs of customers, counterparties, the media and others for information about their readiness; has policies and decision-making arrangements for managing their business risks which take into account not only the needs of the institution but the broader market implications of decisions; has effective event and communications management arrangements for the event period itself; has in place plans to meet other related challenges, including the impact of the Leap Year in 2000."

The statement sets out the way in which the FSA and the Bank of England will operate over the date change period itself. This includes a detailed description of information flows designed to build a comprehensive picture of the UK financial service industrys transition to 2000. The chapter will also enable firms to complete their final planning for the date change period in the knowledge of what will be required by the UK authorities.

Notes for editors

On 22 July, the FSA gave its latest assessment of the state of readiness of the UK financial services industry. Of 450 High and Medium Impact firms:

10% were rated as Green "done" all reasonable steps taken 62% as Blue "on track" 28% as Amber "behind but expected to catch up" 0.5% as Red (2, both medium impact) "serious risk of material disruption"

The FSAs assessment of firms'' Year 2000 preparedness is based on regular reports of their progress in remedying business critical systems and in preparing effective business continuity plans. The primary responsibility for achieving Year 2000 compliance and effective business continuity rests with financial institutions themselves. Year 2000 is a regulatory issue because of its impact on depositor, investor and policy-holder protection; on prudential soundness of financial institutions; and market integrity. Promoting Year 2000 preparedness is a major FSA supervisory priority.

"Towards the Millennium The FSA and the Year 2000" can be found on the dedicated Year 2000 section of the FSAs web-site. The section also includes Publications, Speeches, Press Notices, Guidance for FSA Supervisors and links to other Year 2000 sites. http://www.fsa.gov.uk/y2kcomp.htm