Indonesian capital market ready to tackle millennium bug

Indonesian capital market ready to tackle millennium bug

JAKARTA (JP): The country's capital market and its supporting
institutions are all prepared for the millennium bug, according
to the Capital Market Y2K Implementation Committee.

Committee chairman Surdiyanto Suryodarmodjo said on Wednesday
that investors did not have to worry about possible disruptions
in stock trading activities in the new year as trading systems at
both the Jakarta and Surabaya stock exchanges were 100 percent
Year 2000 (Y2K) compliant.

The Indonesian Clearing and Settlement Agency (KPEI) also
achieved 100 percent Y2K compliance in its computerized clearing
system, he said.

Surdiyanto acknowledged that the Indonesian Central Securities
depository (KSEI) had not complied but he said that it would not
affect overall transactions because the institution still used
manual systems in daily operations.

He said two-thirds of the 186 securities companies had
completed and passed a process of final testing for Y2K
compliance. The remaining one-third were declared free from Y2K
effects because they were using manual and semimanual operating
systems.

The Y2K bug, which stems from a common programming practice
which only uses two digits for the year, strikes Jan. 1.
Computers that are not updated could mistake '00' as 1900. The
error could create problems ranging from power outages to billing
errors.

Surdiyanto said the committee also prepared a business
contingency plan (BCP) to anticipate possible trading disruptions
in the new millennium.

"We now have to make sure the securities companies passing the
Y2K test have an acceptable BCP," he said, adding that the
scheduled review would be conducted from Friday through Sunday.

In the overall capital market contingency business plan, there
are four alternative steps for anticipating the coming Y2K bug,
he added.

The first alternative step was to overcome the Y2K problems
and go on with the current system. The second was to switch to a
prepared back-up trading system. The third was to use the
Internet facility through the "software-based multilateral
netting". And finally, if all the above still fail, the Jakarta
Stock Exchange (JSX) would go back to using manual trading,
Surdiyanto said.

Going back to the manual system would also apply to clearing
and settlement activities of trading which are conducted by KPEI.

Surdiyanto also mentioned about steps to deal with the Y2K bug
if it came from other institutions outside the capital market
community.

He said if there was a problem in the telephone lines the
stock exchanges had set up extra standby lines as a backup.

"Or else we would use a courier as a worst case scenario," he
said.

Jakarta Stock Exchange had prepared six diesel-fueled
generator sets in anticipation of electricity failure, he said.

Minister of Communications Agum Gumelar, who is also serving
as the chairman of the Y2K national committee, said just about
all important business sectors in Indonesia had announced their
Y2K compliance.

"For example state-owned PLN and the country's capital market
have announced that they are respectively 100 percent and 96
percent Y2K compliant," he said.

Agum said it was a blessing in disguise that there were many
institutions in a wide range of sectors in Indonesia that were
not fully computerized, thus, they would not be affected by
possible problems.

"Every government office is manually operated except for the
Ministry of Finance, the National Statistics Bureau, National
Meteorology and the Institute of State Personnel Administration
(BAKN)," he said.

He said only 6 percent of 4,000 power producers in the country
could be affected by the Y2K bug, while the remaining 94 percent
operate under a manual system.

"Almost all of the country's power producers are still using
an analog-based system," he said.

Agum is the chairman of the national committee for Y2K, whose
tasks are to oversee the country's preparation in anticipating
the coming Y2K bug on Jan. 1, 2000.

The main focus of the national Y2K committee, which was
established in 1998, is on finance and banking, health,
transportation, electricity, energy and government sectors. (udi)