Currently pxParseExcelFile activity does not parse .xls file type. Below are the steps to achieve this requirement.

1) Go to Pega Market place and search for ADK File parsing. Download and import into your application stack.

https://community.pega.com/marketplace/component/adk-file-parsing-and-repository-utility

2) Set the below local variables in the parsing activity.

Local.FileReference = pxRequestor.pyFileUpload

Local.NewFileReference = @String.whatComesBeforeFirst(Local.FileReference,'.')+".xlsx"

3) Use the function - @ConvertXLSToXLSX(Local.FileReference,Local.NewFileReference)

4) Create an .xlsx file type template only while using the pxParseExcelFile activity.