Submission of Reports on Y2K Street Wide Testing

August 26, 1999 PSE MEMO FOR BROKERS NO. 310-99 SUBJECT : Submission of Reports on Y2K Street Wide Testing This is with reference to the attached letter from PCD explaining the problem encountered with the online function of the PCD System during the PCD Y2K Street Wide Test last Saturday, 21 August 1999. As mentioned in the letter, PCD will not be conducting another Street Wide Test . Brokers however may still complete the test without the online functions by downloading the February 29, 2000 morning reports and the EOD report extract files and subsequently printing the necessary reports from their respective workstations. Alternatively, hard copies of the said reports may be picked up at PCD. Procedural details on how to complete the street wide test are also included in the attached letter from PCD. In this connection, the deadline for submission of the required Y2K Street Wide Test reports for brokers who have not been formally advised by PSE that they have already satisfactorily submitted the complete required computer printouts and certification is moved from Wednesday, 25 August 1999 (per Memo For Brokers No. 296-99) to Wednesday, 1 September 1999 . LLphil Brokers who have already fully complied with the requirements duly acknowledged by PSE need not submit these reports anymore. For further queries, please contact Mr. Reggie Javier of PCD at telephone number 893-5636 or Ms. Joanna Camaya of PSE at telephone number 891-9001. For your information and guidance. (SGD.) RAFAEL L. LLAVE Chief Operating Officer PHILIPPINE CENTRAL DEPOSITORY, INC . August 23, 1999 (2:00 p.m. version) Mr . Harley Llave Chief Operating Officer Philippine Stock Exchange Dear Harley, This is to apprise you of the results of the resumption of the second part of the Y2K Street Wide Testing (SWT) last Saturday, August 21, 1999. "When it rains, it pours." We encountered a tape drive problem last Saturday just when the restore process was about to be finished. The problem is not related to Y2K and it affected the online functions only (i . e ., brokers could not log into Fintracs ). Brokers were able to log into the network and perform report extract download to print the Feb. 29, 2000 "morning" reports. Thus, they could check their stock and cash dividend entitlements as well as their securities positions using the reports. Those brokers who were not able to retrieve their Feb. 29, 2000 "morning" reports last Saturday could do so any time this week. LLpr We have a standby spare tape drive, but, running the restore process again will take at least four (4) hours. Thus, we decided to advise the brokers to go home after they did their extract download (around 10:00 a.m.) and continued with the SWT internally after we fixed the tape drive problem. The good news is , despite the fact that brokers were not able to use the online functions last Saturday, the SWT can still be completed successfully. The brokers can download their End-of-Day report extract files for Feb. 29, 2000 any time this week, so they can print their reports including the EQ Stock Ledger Issues with Movements report which needs to be submitted to PSE. We have also printed hard copies of all relevant broker reports as an alternative to doing, the report extract download. The reports (free-of-charge) can be picked up from PCD any time during office hours. Completed Activities a. Running of the Feb. 29, 2000 Start of Day process, which includes, among others: the initial SCCP settlement run payment of stock and cash dividends b. Generation of Feb. 29, 2000 "morning" reports. These are: EQ SCCP Securities Position Projection T + 4 (used to check short positions) EQ Confirmed Entitlements Report (for stock and cash dividends paid on Feb. 29, 2000). Participants can use this report to verify that the cash and stock dividends credited to their accounts are correct. This is in lieu of the online functions which were not available last Saturday. aisadc c. Downloading of the above report extract files to participant workstations. d. Processing of SCCP noon-time batch settlement process. e. Processing of nightly/end-of-day batch run, which includes the generation of EOD reports. The key EOD reports are: EQ Stock Ledger Issues with Movements (to be submitted to PSE); EQ Stock Ledger All Issues; and EQ Failed Exchange Trade Report Brokers (exception for failed PSE trades). Activities Not Performed Since the online functions were not available last Saturday, selling brokers whose "EQ SCCP Securities Position Projection T+4" report shows short positions were not able to source securities to meet their settlement obligations. Sourcing securities could be done by: entering lodgment transactions; and/or doing a non-exchange trade to source securities from other participants. (These online functions were already tested in the August 7, 1999 Y2K SWT.) For these brokers (and their counterparties), they will have "fails" in their Feb . 29, 2000 settlement . They must take this into consideration when reconciling the PCD balances with their own reports . The EQ Failed Exchange Trade Report for Brokers can be used to facilitate reconciliation . We have faxed a slightly different version of this letter to the brokers' backroom personnel together with reminders to either download the PCD report extract files or pick up their hard copies from PCD, reconcile the PCD balances with their own reports and submit the required reports to PSE. They should still be able complete the second round of Y2K SWT sometime this week. We will also issue reminders to brokers via our broadcast facility (NOTESQ). Thank you and best regards. Very truly yours, (SGD.) NELLIE C. DAGDAG President