NYSE, NASD To Form Streamlined Organization

Nov. 28, 2006
U.S. regulators to merge policing of securities firms.

The New York Stock Exchange and the NASD announced plans Nov. 28 to merge their private sector regulatory operations overseeing U.S. securities firms into a single, streamlined organization.

The creation of a single private sector regulator, which has not yet been named, will benefit the securities industry by millions of dollars a year in costs savings and simplify the regulatory landscape, according to the NYSE and NASD.

NASD and NYSE regulators can sanction and fine brokers or traders and permanently bar them from working, but they have weaker powers than the federal Securities and Exchange Commission (SEC), which can file civil prosecutions against wrongdoers.

Officials hope to get the single self-regulatory body up and running by the second quarter of 2007, although the plan is subject to final SEC approval.

Securities firms operating in the United States have to adhere to a confusing mix of state, federal and industry regulation, but SEC chairman Christopher Cox said a unified industry watchdog would help cut back some of the red tape.

"They are today taking the first definitive step toward a historic change that will simplify and strengthen the current self-regulatory structure in the United States," said Cox.

Mary Schapiro, currently the NASD chief executive, will serve as the new organization's CEO, which will merge 2,400 NASD staffers with 470 NYSE regulatory specialists.

The NASD, formerly the National Association of Securities Dealers, polices 5,100 securities firms across the United States, including 200 larger firms that are overseen by both the NASD and the NYSE.

Copyright Agence France-Presse, 2006

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