News Release

NASD Board Approves Preliminary Plan for a Major Restructuring Final Board Vote Likely by Early January, 2000

New York, NY—The National Association of Securities Dealers, Inc. (NASD® ), today announced that its Board of Governors unanimously approved a preliminary plan for a major restructuring. The Board also reviewed and accepted the findings of the Review Committee (the "fairness" committee). Refinements of the plan are expected to be completed promptly with a final Board vote expected in early January.

NASD Chairman and Chief Executive Officer Frank G. Zarb said, "We are nearing the culmination of a process to restructure the NASD that began in August, 1998. The process has been thoughtful and deliberate. We have received constructive input from members, issuers, buy-side institutions and others, as well as investment bankers and legal counsel. In today’s discussion there was a spirit of cooperation among all members of the Board. We are working together to get this right."

Zarb continued, "One of the issues that has been raised is the timing of an NASD member vote on this restructuring. While a final decision has not been reached, the Board is working together to resolve this in a way that balances the need to act expeditiously with the need to be inclusive in the process. Our goal is to find a way to do both."

NASD Board member and President of Zeus Securities, Inc., Alan L. Davidson commented, "All members of the Board are working to develop a proposal that is fair and in the best interests of members, issuers, and the public. We’re all committed to an outcome that is inclusive and fair. I believe that the plan on the table today is reasonable, fundamentally sound, and in the direction NASD should be heading. We are close to a positive and major milestone in the history of the NASD Board and are working together as we finalize the restructuring."

The findings of the Review Committee were presented and discussed by the NASD Board. The Board endorsed the Review Committee’s recommendations and conclusions. The Review Committee was appointed at the July 29 meeting of the NASD Board to provide an independent assessment of the fairness of the proposal. The Review Committee was composed of a cross section of NASD Board members who had not been part of the Baxter Committee (the Board Committee formed in August 1998 to consider strategic restructuring alternatives). The Review Committee was chaired by Professor Robert R. Glauber of Harvard University and engaged its own independent legal and financial advisors.

The National Association of Securities Dealers, Inc. (NASD), is the largest securities-industry, self-regulatory organization in the United States. It is the parent organization of The Nasdaq-Amex Market Group, Inc., and NASD Regulation, Inc. Through The Nasdaq-Amex Market Group, the NASD operates The Nasdaq Stock Market® and the American Stock Exchange. Through its regulatory subsidiary, the NASD develops rules and regulations, provides a dispute resolution forum, and conducts regulatory reviews of member activities for the protection and benefit of investors. The NASD oversees the nation’s 5,600 brokerage firms and more than 600,000 registered brokers. For more information about the NASD and its subsidiaries, please visit the following Web sites:;;; or the Nasdaq NewsroomSM at