- The Washington Times - Tuesday, November 18, 2003

NEW YORK (AP) — The New York Stock Exchange’s members voted to install a new independent board with the task of minimizing conflicts of interest and potential investor abuses, according to preliminary results. Federal regulators still must approve the measure.

The NYSE’s 1,366 members, made up largely of securities and trading firms, approved interim Chairman John Reed’s package of reforms, the exchange said yesterday.

Mr. Reed’s plan eliminates the current 27-member board in favor of six to 12 directors who will oversee regulation and compensation. A separate executive panel of the securities industry will handle operations, such as listing standards.

The exchange said a new board of eight directors will be installed immediately. The number of directors can change from year to year, and can vary between six and a dozen.

The plan and the nominees still must be approved by the Securities and Exchange Commission. Exchange officials are hoping to receive that authorization in mid-December.

The timing of the SEC’s approval is critical because Mr. Reed has said he hoped to name his successor by year’s end. While a new board can likely meet and discuss possible candidates, it is doubtful that it can hire a new NYSE leader.

“The SEC has to approve the whole scheme. It’s the SEC’s final call,” said Charles Elson, director of the Center for Corporate Governance at the University of Delaware. “What they have is an improvement … but the devil is in the details.”

The SEC declined to comment yesterday on whether it would approve the proposed reforms. SEC Chairman William Donaldson, a former NYSE chairman, on Monday called the reforms a good first step, but suggested that additional changes might be necessary.

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