|  | | 2006 News and Press Releases | | |
HEADLINE NEWS:
Small Brokers Cry For Help
Liz Moyer
Forbes.com. December 14, 2006
_________________________________________________________________________
EXCERPT: Small brokerages are fighting the merger of NASD (formerly known as the National Association of Securities Dealers) and the regulatory arm of NYSE Group, contending that the combination would do little to serve investor interests and would significantly diminish the influence of small brokerages in policymaking and other matters. "We have a better plan," opens a letter dated Dec. 11 that is being circulated to NASD member companies by a group called the Financial Industry Association. The FIA's biggest bone of contention appears to be a significant reduction in the number of board seats small broker members can vote on under the new organization, to three from the 16 governor seats on which they can currently vote. There are 17 NASD board seats, including the chairman. Three seats have been allocated to small member firms under the merger plan, up from the guarantee of one now. (Large firms will vote for their three governor seats under the new plan, and medium-sized firms will be voting for their one representative as well.) But the FIA says not being allowed to vote for the broader slate of governor candidates lessens their say in self-regulation and other matters of concern to the association. "If you accept the NASD's over 600 new bylaw changes, in this very rushed balloting process during the holiday season, your firm may be regulated out of business within a short time," the letter says. The FIA's "better plan"? Payment of $100,000 per NASD member regardless of firm size (that's up from $35,000 to each member, proposed in the merger); the immediate release to members of the $35,000 promised to each in the merger; an immediate election of the board of directors; opposition to net capital increases for members; and the preservation of one-member, one-vote on the board. The letter is urging member firms to vote "no" on any ballot they receive from NASD. |
|
|
