- The Washington Times - Sunday, January 21, 2007


Members of NASD have approved bylaw changes needed to combine regulatory functions with NYSE Group Inc. and form one organization to oversee U.S. securities brokers and dealers, NASD said yesterday.

Consolidating the self-regulatory functions of NASD, formerly known as the National Association of Securities Dealers, and NYSE into one entity will help end duplication, reduce costs and make U.S. markets more competitive, NASD said.

“The securities industry has embraced replacing an outdated regulatory structure with one that better serves firms and investors in a fast-changing marketplace,” said NASD Chairman and Chief Executive Officer Mary L. Schapiro.

About 83 percent of the 5,058 NASD firms eligible to vote did so during the 33-day election period that ended Friday, and 64 percent supported the bylaw changes, NASD said. The Securities and Exchange Commission also must approve the changes.

Plans for the new self-regulatory organization, which will be named later, were announced in November. It will become the single regulator for the country’s nearly 5,100 broker-dealers that had been part of NASD. About 200 of those firms also are members of NYSE and have been regulated by both organizations.

Under the plan, NASD firms will receive a payout of $35,000 apiece for anticipated cost savings, and some member fees also will be reduced for five years.

Supporters of a single regulator include SEC Chairman Christopher Cox and the Securities Industry and Financial Markets Association. Compliance costs have nearly doubled from $13 billion in 2002 to more than $25 billion in 2005, SIFMA said.

“A single regulator, with one rule book, one set of procedures and one set of examinations will eliminate regulatory confusion and reduce wasteful redundancy,” SIFMA Co-CEO Micah Green said.

Not everyone agrees. The president of the Public Investors Arbitration Bar Association has said combining the two regulators is “anti-investor” because it eliminates choice, and others have said the terms of the merger would harm small firms within NASD.

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