[Federal Register Volume 63, Number 171 (Thursday, September 3, 1998)]
[Notices]
[Pages 47051-47052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23760]


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SECURITIES AND EXCHANGE COMMISSION

[Release Nos. 33-7568; 34-40377; 35-26912; IA-1749; and IC-23416]


Commission Statement of Policy on Regulatory Moratorium to 
Facilitate the Year 2000 Conversion

AGENCY: Securities and Exchange Commission.

ACTION: Policy Statement.

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SUMMARY: The Securities and Exchange Commission (``SEC'' or 
``Commission'') is announcing a moratorium on the implementation of new 
Commission rules that require major reprogramming of computer systems 
by SEC-regulated entities between June 1, 1999 and March 31, 2000. The 
moratorium is intended to facilitate and encourage securities industry 
participants to allocate significant time and resources to addressing 
the potential problems caused by the Year 2000 computer technology 
conversion.

FOR FURTHER INFORMATION CONTACT: Primary Contacts--Sheila Slevin at 
(202 942-0796), or Sarrita Cypress at (202 942-0735), Division of 
Market Regulation. Secondary Contacts for Specific Program Areas--Mauri 
Osheroff at (202 942-2840), Division of Corporation Finance, or Robert 
E. Plaze (202 942-0716), Division of Investment Management.

SUPPLEMENTARY INFORMATION:

I. Background

    The ``Year 2000 problem'' is generally understood to be a problem 
caused by computerized systems that are programmed to use a two-digit 
rather than four-digit number to represent the year. The ``19'' that 
precedes dates in this century was assumed. Consequently, systems 
programmed in this fashion may mistake the Year 2000 for 1900, or some 
other incorrect date. To mitigate potential problems caused by the Year 
2000 computer conversion, the SEC has worked closely with the 
securities industry to encourage participants to remediate systems that 
are not Year 2000 compliant and test systems that are critical to the 
operation of the nation's capital markets as the millennium approaches.

II. Year 2000 Regulatory Moratorium

    Because the Commission views the Year 2000 problem as an extremely 
serious issue, it has determined to declare a moratorium on the 
implementation of new Commission rules requiring major reprogramming. 
Under this moratorium, no new Commission rules requiring major 
reprogramming will be made effective between June 1, 1999 and March 31, 
2000.
    Although the Commission will continue to consider necessary 
revisions to its rules, it will refrain from putting into effect 
changes to its rules having a major impact on computer systems during 
this critical transition period. Of course, the Commission reserves the 
right to implement new rules, where such rulemaking is necessary to 
protect the public interest in response to emergency conditions or 
special circumstances that may arise during the moratorium.\1\
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    \1\ This moratorium will not apply to rules designed to 
implement changes to the EDGAR system.
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    The regulatory moratorium is limited to Commission rulemaking and 
shall not apply to rule changes by self-regulatory organizations, such 
as the National Association of Securities Dealers, Inc.

[[Page 47052]]

and the New York Stock Exchange, or independent standard setting 
organizations like the Financial Accounting Standards Board.\2\
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    \2\ Rules and standards established by private entities such as 
the Securities Investor Protection Corporation and the American 
Institute of Certified Public Accountants similarly are not subject 
to the moratorium.
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    This policy statement is intended only to set forth the 
Commission's intention and expectation regarding its rulemaking 
activities during the period indicated above.\3\ It also shall not be 
construed as creating any right or benefit, substantive or procedural, 
enforceable at law or in equity, by any person against the Commission. 
This policy statement shall not be construed to create any right to 
judicial review involving the compliance or noncompliance of the 
Commission with the statement.
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    \3\ Accordingly, the moratorium shall not affect any remedies 
the Commission may seek in an enforcement proceeding against a 
regulated entity.
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III. Regulatory Requirements

    This general policy statement is not an agency rule requiring 
notice of proposed rulemaking, opportunities for public participation, 
and prior publication under the provisions of the Administrative 
Procedure Act (``APA'').\4\ Similarly, the provisions of the Regulatory 
Flexibility Act,\5\ which apply only when notice and comment are 
required by the APA or another statute, are not applicable.
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    \4\ 5 U.S.C. 553.
    \5\ 5 U.S.C. 601-602.
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IV. Conclusion

    The Commission believes the foregoing statement of policy provides 
a sound basis for the Commission's action and makes a significant 
contribution to meeting the needs of investors and the capital markets.

    By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 98-23760 Filed 9-2-98; 8:45 am]
BILLING CODE 8010-01-U