News Release

AMEX Issues Voting Materials on Combination with The NASD

New York, May 18 – The American Stock Exchange today announced it has sent to its membership an Information Memorandum detailing the proposed combination with the National Association of Securities Dealers, Inc. (NASD). The Exchange’s 864 Regular and Option Principal Members will vote at a Special Meeting scheduled for Thursday, June 25, 1998. A two-thirds majority vote is required to approve the transaction, which was approved unanimously by the Board of Governors of the Exchange and the Board of Governors of the NASD in early April.

A summary of the transaction follows.

  • Financial Commitment
    • $110 Million to be Spent Over 5 Years to Upgrade Technology and Trading Facility
    • $40 Million Seat Market Fund Established (designed to grow to $50 million or more)
    • $30 Million Expected to be Spent Over Next 2 Years for Joint Marketing
  • Amex Equity Market Enhanced
    • Continues as Centralized, Floor-Based, Specialist Auction Market
    • Enhanced Electronic Access With Automatic Execution Capabilities
    • New Electronic Limit Order Book Provides Increased Access and Market Transparency
  • Options Market Structure Remains in Current Form
    • Will Benefit From Higher Level of Technology
  • Members Retain Current Trading Rights
    • Maintain Current Lease and Sale Rights
    • No New Seats Issued Without Member Approval
  • Members Maintain Substantial Input into Significant Future Changes
    • Six Members Serve on New Amex Board, Including Four From the Floor
    • Amex Committee – Special Committee Established to Represent Interests of Members and be Involved in Significant Corporate Governance Decisions
  • Amex Becomes Separate Subsidiary of the NASD
    • Amex & Nasdaq Markets to Operate Separate and Independent From One Another
    • Amex & Nasdaq to Share Certain Resources
    • Amex & Nasdaq to Operate Under NASD Market Holding Company for Tax Consolidation Purposes

Amex Chairman and Chief Executive Officer Richard F. Syron stated that "This combination is designed to benefit issuers, members and, most importantly, the investing public." In a letter to Members, Syron wrote "We believe that our alliance with the NASD will provide a platform that will ensure the health and vitality of the Amex for generations to come."

NASD Chairman and Chief Executive Officer Frank G. Zarb also wrote to Amex Members, "We are excited about the proposed alliance of our two exchanges and the creation of a state-of-the-art marketplace—a "Market of Markets"—capable of effectively competing anywhere in the world."

The American Stock Exchange is the only primary marketplace in the United States for both equities and derivative securities. The Amex trades more than 900 issues on its primary list. In the options market, the Amex trades options on 30 broad-based and sector indexes, as well as 941 stocks and 110 Long-term Equity Anticipation Securities (LEAPS). In addition, the Amex is a leader in listing warrants on foreign currencies and indexes, as well as hybrid instruments and other structured products such as SPDRs®, DIAMONDS™ and WEBS™.

The National Association of Securities Dealers, Inc., is the largest securities industry self-regulatory organization in the United States. Through its subsidiaries, The Nasdaq Stock Market, Inc., and NASD Regulation, Inc., the NASD designs, operates and regulates securities markets and develops rules and regulations, provides a dispute resolution forum and conducts regulatory reviews of member activities, all for the benefit and protection of the investor.