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June 25, 1999
Web posted at: 12:55 p.m. EDT (1655 GMT)

by Thomas Hoffman

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NEW YORK (IDG) -- A commissioner for the Securities and Exchange Commission (SEC) Wednesday said the agency has proposed a year 2000 operation capability rule. The rule would require brokerages to verify their year 2000 readiness by Oct. 15 or risk being shut down.

Speaking at a Securities Industry Association conference here, SEC Commissioner Laura Unger said shutting down firms is "not something we want to do or expect to do on a broad scale" but is within the authority of the SEC to carry out.

Under the proposal, the brokerages' directors would be required to sign a certificate that says their year 2000 remediation has been completed by Oct. 15.

The SEC will be meeting to vote on the proposed rule "very soon," Unger said. If approved, the rule would go into effect immediately.

The move was the latest skirmish in the war the SEC is waging to get companies to be more forthcoming about their Y2K plans and where their weaknesses are. In October last year, the SEC disciplined 37 brokerage firms for failing to file disclosure reports on their year 2000 projects (see "SEC lowers boom on Y2K data," link below).