Notice to Members 97-96

Member Requirement: NASD Members Must Complete Year 2000 Compliance Survey

As the year 2000 approaches, organizations throughout the world are facing theformidable challenge of ensuring that their own computer systems, and othercomputer systems they depend upon, will continue to operate successfully whenprocessing data/information with dates after December 31, 1999. This appliesboth to information technology systems used to conduct a securities business and general business support systems (e.g., telephone, power, elevator). This challenge is particularly acute in the securities industry, due to its heavy reliance on information technology.

In response to this challenge, this Notice reiterates the responsibility of each andevery member of the National Association of Securities Dealers, Inc. (NASD®) to analyze the readiness of its own computer systems, as well as other computer systems that each member relies upon. The NASD has been working in conjunction with other regulators and the securities industry to address these challenges, and has put forward several communications about this very important Year 2000 issue.1

To ensure that members are on a course to make their systems and applications Year 2000 compliant, NASD Regulation, Inc., requires all members to return a completed “Year 2000 Compliance Survey” to NASD RegulationSM no later than January 31, 1998. Member firms that have returned a completed “Year 2000 Survey” to the New York Stock Exchange are exempt from this requirement at this time.

Questions or comments regarding the survey should be directed to Adam Levine, Compliance Department, NASD Regulation, at (202) 728-8901; or Paul Voketaitis, Compliance Department, NASD Regulation, at (202) 728-8843. Questions regarding the NASD’s Year 2000 Program should be directed to Lyn Kelly, Year 2000 Program Director, at (301) 590-6342.