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Tim Quast
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We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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March 1, 1998

Senator Bennett's Year-2000 Bill May Be Dead

By Jeffrey L. Winograd

Sen. Robert Bennett's (R-Utah) proposed legislation to require public companies to file Year-2000 compliance information is unlikely to merit a footnote in history.

The Securities and Exchange Commission recently issued Year-2000 disclosure requirements, and the White House weighed in with the appointment of a Year-2000 czar, putting a break on the Utah Republican's political initiative.

Enthusiasm

While Bennett is still planning to continue Senate oversight hearings on his bill, enthusiasm for the proposed legislation has substantially waned.

"I haven't looked at the bill," Sen. Phil Gramm (R-Texas), chairman of the securities subcommittee of the Senate Banking Committee, told reporters at a National Press Club breakfast. He added that he would prefer corporate America to handle the issue on its own.

The Securities Industry Association also dampened the prospects of Bennett's legislation. "We don't think it's necessary," said SIA President Marc Lackritz.

Specifically, Bennett recommended a detailed description of a corporation's progress in Year-200 remediation efforts; a statement of likely litigation costs and liability outlays associated with the defense of possible lawsuits; disclosure of insurance coverage for computer failures and related lawsuits filed by investors; and a breakdown of contingency plans for computer failures.

Interruptions

As previously reported, Bennett expressed his fears about Year-2000 compliance on trading desks in an interview last December. He was particularly concerned about interruptions in market-data streams, noting that a glitch could cause serious harm.

There is no doubt that Bennett helped to focus more attention on Year-2000 compliance even though the SEC and the White House stole much of his political thunder.

For some pundits, Bennett's effort shows just one thing that hours of staff work, burning the midnight oil writing Year-2000 legislation, may, in hindsight, seem fruitless. But for other pundits, the sheer detail in Bennett's legislation, in addition to his Senate hearings, demonstrate a remarkable vision that will not be forgotten easily.