Stock exchange relaxed on impact of Dow Jones digit limit

A potential digit field problem facing Wall St won't be much of an issue in New Zealand, says Stock Exchange information systems manager Wayne Zander. There's concern in the US that when the Dow Jones index goes through 10,000 - it's currently hovering around 9000 - many data fields in computer systems may not be capable of dealing with five digits. Brokerages, financial houses and companies with their own investment divisions could be affected.

A potential digit field problem facing Wall St won't be much of an issue in New Zealand, says Stock Exchange information systems manager Wayne Zander.

There's concern in the US that when the Dow Jones index goes through 10,000 — it's currently hovering around 9000 — many data fields in computer systems may not be capable of dealing with five digits. Brokerages, financial houses and companies with their own investment divisions could be affected.

The New Zealand Stock Exchange launches its upgraded Faster system on May 18 — subject to enabling legislation — which should greatly reduce risk in the paperless buying and selling regime.

"We have plenty of space to handle these digits," Zander says. "However, some older style interfaces mightn't, and we still support some of these for the stragglers."

The Faster system was installed in 1991. The new version means buyers will get a statement rather than a certificate. An account number, the class of shares and a Faster identification number will be quoted instead of having to sign a share transfer form and hand in share certificates.

Completion of the average settlement is now expected to take a day and a half, compared to up to five days previously. That, says Zander, gets rid of the principle risk associated with delays.

"So the only risk now is systemic. The only way to get rid of that is instantaneous trading, which may happen in the next three to four years."

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