Moving Fast on New SRO

Richard G. Ketchum, CEO of NYSE Regulation will continue that role at NYSE, overseeing “market surveillance and listed company compliance at the New York Stock Exchange and NYSE Arca,” and, in addition, will be non-executive chairman of the new SRO.

As promised by Schapiro in her comments on November 16 at the NASD’s Fall Compliance Conference in Los Angeles, there will be representation for “firms of all sizes” on the board of the new entity: There will be a 23-member board of governors, including 11 public governors. Large firms, (500 or more registered persons), will be represented by three governors, as will small firms (150 or fewer registered persons); mid-sized firms, investment companies, independent dealer/insurance affiliated firms, and NYSE floor members are each guaranteed one governor.

Since the move to combine the two SROs into one entity is expected to save costs for the organizations themselves and for NASD member firms, it was announced that each NASD member firm would get a “one-time payment of $35,000 in recognition of anticipated cost savings that will result from the implementation of the plan.” Operations are expected to begin in the second quarter of 2007, with “the current 2,400-person NASD organization and approximately 470 of NYSE Regulation’s member regulation, arbitration, and related enforcement team.”