News Release

AMEX Membership Overwhelmingly Approves NASD/AMEX Merger

New York, New York, June 25, 1998—The National Association of Securities Dealers, Inc. (NASD®), and the American Stock Exchange (Amex) jointly announced today that the Amex Membership has voted overwhelmingly to approve the addition of Amex into the NASD family of companies. The vote was 622 to 206. This strategic combination creates a market alliance unparalleled in technology, expertise, information and order execution to meet the needs of investors worldwide. NASD and Amex expect the combination to close before the end of this year, subject to the receipt of regulatory approvals of the Securities and Exchange Commission and the Department of Justice.

"This combination of the Amex and the NASD is a win for all market participants—NASD and Amex member firms, listed companies and, most importantly, investors," said Frank G. Zarb, Chairman and CEO of the NASD. "It will lead to reduced costs and allow us to build a Market of Markets where market participants will have access to the most advanced auction, dealer and options markets in the world. As a growing, global Market of Markets we are committed to taking the necessary steps to significantly encourage investment, enhance the ability of companies to access financial resources and assure timely, informed execution of investment decisions."

"The Amex Membership has embraced change in order to thrive," said Amex Chairman and CEO Richard F. Syron. "This is a new beginning for us, repositioning the Amex as a much more vibrant competitor in equities, and an even more aggressive force in the options business."

As previously announced, the agreement generally provides for the following:

  • Financial commitment
    » $110 million spent over five years to upgrade Amex technology and trading facility
    » $30 million for joint marketing over the next two years
    » $40 million seat market fund established to provide stability in seat prices, designed to grow to $50 million or more
  • Amex equity market enhanced
    » Continues as floor-based, specialist, central auction market
    » New electronic order book with automatic execution capabilities and increased limit order transparency
  • Options market structure remains in current form
    » Will benefit from higher level of technology
  • Members retain current rights
    » Continue current trading rights
    » Continue current lease and sale rights
    » Maintain liquidation preference
  • Amex members maintain substantial input into significant future changes
    » Six members serve on new Amex board, including four from the floor
    » Amex committee established to represent interests of members
    » No new seats issued without member approval
  • Amex becomes separate subsidiary of the NASD
    » Amex and Nasdaq markets to operate separate and independent
    » To leverage resources, Amex and Nasdaq to share certain facilities
    » Amex and Nasdaq to operate under NASD market holding company for tax consolidation purposes

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 and 963 stocks and 114 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®, DIAMONDSSM and WEBS™.

The National Association of Securities Dealers, Inc., is the largest securities industry self-regulatory organization in the United States. The NASD is the parent of The Nasdaq Stock Market®, the fastest growing stock market in the United States and the world’s largest electronic market. More than 5,400 companies are traded on Nasdaq®, including such major corporations as Microsoft, Intel, Dell Computer Corp., Cisco Systems, and Amgen. Through its subsidiary, NASD Regulation, the NASD regulates securities markets, develops rules and regulations, provides a dispute resolution forum and reviews member activities, all for the benefit and protection of the investor.