It was announced at the weekend that in a step toward ending duplication, reducing inefficiency and strengthening the competitiveness of American markets, National Association of Securities Dealers member firms overwhelmingly approved by-law changes necessary for the consolidation of the NASD and NYSE member regulation functions into a single, self-regulatory organization (SRO).
"The securities industry has embraced replacing an outdated regulatory structure with one that better serves firms and investors in a fast-changing marketplace," announced Mary L. Schapiro, NASD Chairman and CEO. She continued:
"Firms took the lead in shaping the future of self-regulation, and I applaud them for the mandate they gave this consolidation. I appreciate that so many NASD members took the time to study the proposal and to participate in the voting process."
Voting results indicated strong support for the changes among NASD firms of all sizes and geographic regions. Almost 83% of the 5,058 firms eligible to vote cast a ballot during the 33-day election period, with 64% supporting the By-Law changes.
The consolidation plan was announced by NASD and NYSE Group on Nov. 28, 2006, and calls for the formation of a new SRO that will be the private-sector regulator for all securities brokers and dealers doing business with the public in the United States.
The new SRO, which will be named later, will consist of the current 2,400-person NASD organization and approximately 470 of NYSE Regulation's member regulation, arbitration and related enforcement team.
The plan is designed to create a single regulator for the country's nearly 5,100 broker-dealers, eliminating overlapping regulation and reducing costs to the industry.
The by-law changes, which will facilitate governance changes at the new SRO, are subject to approval by the US Securities and Exchange Commission.
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