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FINRA

 

For Release:
Contacts:
Sunday, January 21, 2007
Nancy Condon
(202) 728-8379

 


NASD Member Firms Embrace Streamlined, More Efficient Regulation

Washington, D.C. — In a critical step toward ending duplication, reducing inefficiency and strengthening the competitiveness of American markets, NASD 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"The securities industry has embraced replacing an outdated regulatory structure with one that better serves firms and investors in a fast-changing marketplace," said Mary L. Schapiro, NASD Chairman and CEO. "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 percent of the 5,058 firms eligible to vote cast a ballot during the 33-day election period, with 64 percent supporting the By-Law changes.

The vote was tallied by Corporate Election Services, an independent proxy tabulation company.

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 U.S. Securities and Exchange Commission.

NASD is the largest private sector provider of financial regulatory services, dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. Almost 5,100 brokerage firms, roughly 169,000 branch offices and more than 650,000 registered securities representatives come under NASD's jurisdiction. NASD touches virtually every aspect of the securities business-from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws and administering the largest dispute resolution forum for investors and securities firms. More information about NASD is available at: www.nasd.com