News Release

NASD Launches Member Vote on Restructuring and Opens Subscription Period for the Initial Phase of Nasdaq Private Placement

New York, NY – The National Association of Securities Dealers, Inc. (NASD®) today launched the member vote on its proposed restructuring and simultaneously opened the subscription period for the initial phase of the Nasdaq private placement.

NASD Chairman and Chief Executive Officer Frank G. Zarb, commenting on the member vote, said: "Today marks an historic day for the NASD and its members. I urge members, both large to small, to consider the materials they will soon receive and vote ‘for’ the restructuring. It is a win-win-win for NASD members, issuers, and investors."

A summary of the proposed restructuring is provided in the attached fact sheet.

Member Vote

Today, proxy materials are being mailed to approximately 5,500 NASD members in good standing as of February 18, 2000. Each member firm is entitled to vote on the restructuring, on the basis of one firm, one vote.

A special meeting of the members of the NASD will be held on April 14. At that meeting, if at least a majority of NASD members present in person or by proxy vote to approve the restructuring, then the first phase of the restructuring will be completed promptly (i.e., late April or May.)

Subscription Period for the Initial Phase of the Private Placement Opens

Also, today, simultaneous with the launch of the member vote on the restructuring, begins the subscription process for investors -- NASD members, Nasdaq Market participants, and Nasdaq issuers -- providing them an opportunity to subscribe for securities for the initial phase of the private placement.

Note:   Phases 1 and 2 of the restructuring are to be completed through the private placement of shares of common stock and warrants pursuant to an exemption form registration of non-public offerings under the Securities Act of 1933, as amended. The securities will not be registered with or approved or disapproved by the Securities and Exchange Commission or any state Securities Commission. This press release is neither an offer to sell nor a solicitation of an offer to sell any securities. The offer of securities will only be made through a Private Placement Memorandum to be delivered to intended offerees.

A private placement memorandum has been mailed to all NASD members and potential investors for the first phase of Nasdaq’s private placement. The maximum subscription levels for the various categories of investors will differ based on a variety of factors, and are generally intended to be commensurate with their contributions to the revenues of Nasdaq and the NASD. An approximate breakdown of investors participation by category is presented in the attached fact sheet.

The National Association of Securities Dealers, Inc., is the largest securities-industry, self-regulatory organization in the United States. It is the parent organization of The Nasdaq Stock Market®, The American Stock Exchange®, and NASD Regulation, Inc. For more information about the NASD and its subsidiaries, please visit the following Web sites:;;; or the Nasdaq NewsroomSM at