|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
NYSE, Nasdaq Explore Joint Effort
Staff Writer – Deal.com
Securities Mosaic. November 21, 2005
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EXCERPT: The internal regulators of the New York Stock Exchange Inc. and the Nasdaq Stock Market Inc. may team up to better police their member firms but last week strongly opposed creating a "super-regulator" to handle the job. Officials from NYSE Regulation, which supervises the world's largest stock exchange, and Nasdaq overseer NASD told lawmakers last week that cooperation between the bitter stock exchange rivals could go a long way toward reducing regulatory burdens on investment banks and brokerage firms. A joint effort to eliminate duplicative audits and ease other compliance obligations would be a better way to cut the regulatory costs, they said, than would alternative proposals, such as creating a universal regulator that would take over nearly all aspects of financial exchange supervision in the U.S. Complete dependence on governmental regulation "would be a tragic mistake," NYSE chief regulatory officer Richard Ketchum said during a hearing of the House Capital Markets Subcommittee. Self-regulation, he explained, offers not only the benefit of greater industry expertise but also the ability to impose higher ethical standards than federal law requires. How to best handle self-regulation of the exchanges is becoming a bigger issue since the NYSE announced plans to go public by merging with electronic-trading firm Archipelago Holdings Inc. and Nasdaq proposed to combine with Instinet Holdings Inc. The biggest concern is that for-profit, publicly traded exchanges will face the conflicting goal of maximizing profits without compromising regulation. Additionally, the U.S. Securities and Exchange Commission has been looking at the possibility of self-regulating organizations, or SRO, reform. Although NYSE and NASD officials may have their hands full getting these two fierce competitors to play nice, both of the exchange police chiefs were nevertheless clear about the benefits of cooperation. "One glaring inefficiency in today's regulatory scheme is the dual regulation of firms that are members of both the NYSE and NASD. Currently, these 180 firms are faced with dual rulebooks, dual examinations and enforcement, and dual fees," NASD chairman Robert Glauber told the subcommittee. "A solution that makes sense is a partnership between the NYSE and the NASD to jointly handle the regulation." |
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