Regulator to rule on SRO merger bylaw
An SEC bylaw change could eliminate NASD firms' ability to nominate and vote on a majority of the new SRO's board.
Securities and Exchange Commission staff will make a recommendation to the full commission on the proposed NASD bylaw changes within the next few weeks, said Erik Sirri, head of the agency’s division of market regulation, during a Senate banking committee hearing yesterday.
The controversial bylaw changes would eliminate NASD firms’ ability to nominate and vote on a majority of the new self-regulatory organization’s board.
Mr. Sirri did not indicate how agency officials would come out on the issue.
Observers expect the SEC to approve the changes.
Also at the hearing yesterday, Joseph Borg, president of the North American Securities Administrators Association of Washington,
and director of the Alabama securities commission in Montgomery, said state regulators were worried about the ongoing NYSE/NASD rule harmonization efforts.
A review of several rule proposals “raises concerns about the prospect that the rule harmonization project will favor the interests of member firms of the [new single SRO] over the adoption of provisions that protect investors,” Mr. Borg said.
Mr. Borg told the committee that in several cases, weaker NASD rules were being preserved instead of stricter NYSE requirements.
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