Reserve Bank Year 2000 Readiness
Austraclear (New Zealand) System Year 2000 Disclosure Statement
This Statement is a Year 2000 Information Disclosure Statement for the purpose of the Year 2000 Information Disclosure Act 1999. A person may be protected by that Act from civil liability for the statement in certain circumstances.
This Statement has been prepared for Austraclear customers, to indicate the work that we have been doing to make our relevant systems Year 2000 compliant. By Year 2000 compliance we mean "Year 2000 conformity" as defined by the British Standards Institution (Document Ref DISC PD2000-1), namely, that "neither performance nor functionality is affected by dates prior to, during and after the Year 2000".
The Reserve Bank of New Zealand has been working to identify and address all potential Year 2000 problems since early 1997. The Bank's Year 2000 Project Team is confident that it has identified systems in the Bank which may be affected by the Year 2000 problem and has developed plans to repair or replace those which it has identified as not Year 2000 compliant.
Although the Reserve Bank is unable to predict or guarantee outcomes, based on our approach we believe that we have undertaken all reasonable measures to minimise any adverse impact on our working environment within the Bank in the transition to Year 2000.
The Austraclear (New Zealand) System - Our Approach to Year 2000 Testing
In 1997 the Reserve Bank of New Zealand Registry established the Austraclear (New Zealand) System Year 2000 project. Appendix 1 outlines our broad Year 2000 test plan for Austraclear. The expressed objectives of this project are to identify and rectify those areas of the Austraclear (New Zealand) System and associated operations to ensure that the system will be compliant with date formats in the new millennium. This project has the full support of the Governor and senior management team of the Bank.
The Year 2000 project has been subject to audit by the Bank's internal auditors. Furthermore, the Bank has contracted its external auditors to provide a qualitative review of the Bank's Year 2000 project procedures and controls, and the way that Year 2000 risks are being assessed and managed at the Bank.
We believe that we have undertaken reasonable measures in the circumstances to minimise the impact of the transition to the Year 2000 on the Bank's Austraclear operations and stakeholders. However, although we believe we have thoroughly tested the Austraclear (New Zealand) System, this testing, like that undertaken by other system suppliers and operators, has been made on a best endeavours basis. Therefore, neither Austraclear Limited (our software supplier), nor the Reserve Bank can make any representations or give any guarantee that the Year 2000 problem will not materially affect the Austraclear business systems and applications.
The unusual nature of the Year 2000 problem means that the Bank's focus is on taking all reasonable steps to prepare itself for Year 2000 and to reach its objective of Year 2000 conformity. This includes preparing contingency plans in consultation with users of the Austraclear (New Zealand) System. Nevertheless, the Bank cannot assume the risk of subsequent Year 2000 problems. Consequently, the Bank does not accept any liability for any loss or damage suffered by a member or by any other party in its dealings with the Reserve Bank (including without limitation the Austraclear (New Zealand) System) which is caused by or arises out of a Year 2000 problem or the Reserve Bank's or any other party's state of Year 2000 readiness or compliance. Rather, the preferred approach of the Bank to resolve any subsequent disputes is to endorse the Millennium Accord Principles, as set out in Appendix 2.
Austraclear (New Zealand) Members' Test Obligations
It is incumbent on each member to assess its state of Year 2000 readiness, to satisfy itself that its interface with the Bank and its other systems are Year 2000 compliant, and to determine what additional test requirements must be undertaken by the member.
To help members assess and determine what Year 2000 testing they should undertake, we have set out below a summary of our approach to testing, and information about what has been tested by the Bank.
Austraclear (New Zealand) Year 2000 System Testing
The points below are designed to give an indication of the breadth and intensity of our Year 2000 testing of the Austraclear system. The test team comprised two staff with significant Austracler experience. Also, the planning and implementation was complemented by support and advice from Austraclear Limited. The test team took a wide scope with the view to comprehensively test the whole system over key dates.
9 September 1999
31 December 1999 - 6 January 2000
29 February 2000 - 1 March 2000
29 December 2000 - 3 January 2001
For each date we tested the different system operating times - normal operating hours 9.00am to 7.00pm, and the night session, which runs from 8.00pm to 8.40am the next business day.
We Tested (for 9 September 1999 and the period 31 December 1999 to 6 January 2000)
All system modules - fixed interest, equity, discount security, cash, foreign exchange, billing and administration.
The Test Included
All trade types (both auto and manual settlement) Corporate Actions (all types) Pledges, switches and lift pledges (as applicable)
Checking the Transaction Status of Trades
Completed, deleted, corrected, unconfirmed, pending authorisation (at all levels), pending cash limit testing and pending ESAS
Checking Reports of
Same day transactions, SPRINT, archive transactions, and ARSPRINT
Other Functions Tested were
Tenders, FINEWISS, password administration, bank functions, bulk cash, issuer confirmations, sub accounts and depository functions, etc
We Tested for Other Dates
The scope of the tests that we undertook was comprehensive, but less intensive
The test results were pleasing. Our first tests identified some necessary minor programme changes that were quickly resolved by Austraclear Limited (our software providers). Follow-up testing showed full resolution of these minor problems.
Further to our own testing, five member test sessions have been held and only a few additional minor Year 2000 faults were identified. These faults have been fixed.
In total, 51 members have taken the opportunity to conduct Year 2000 functionality testing on our test system. Members who undertook Year 2000 testing indicated that they were satisfied with their test results. In addition to the member tests, we participated in an industry wide Year 2000 test that tested the connectivity of Austraclear and ESAS with other settlement and clearing systems, such as KITS, SRM and SCP. No Year 2000 problems were identified from this testing.
We are in the process
of reviewing our contingency plans and we expect to complete
our Year 2000 contingency planning by August 1999.