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Industry Spotlight > Broker Dealers

NASD Members Say Yes to SRO

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The votes have been counted and NASD members have approved a change to NASD bylaws that will result in the combination of NYSE and NASD regulatory arms into a unified self regulatory organization (SRO), the NASD announced on January 21. The new organization means one entity will oversee broker/dealers with a single “harmonized” set of rules. The NASD cites efficiency and cost savings to firms and to the SRO itself–and indirectly to individual investors–and elimination of many conflicting rules that have bedeviled broker/dealers in the past as some of the main reasons for combining the SROs.

NASD Chairman and CEO Mary Schapiro, who will run the combined entity, said in the announcement: “The securities industry has embraced replacing an outdated regulatory structure with one that better serves firms and investors in a fast-changing marketplace.”

Of 5,058 firms eligible to vote over a 33-day period after the details of the deal were mailed to all firms, nearly 83% of the firms did vote, and of those who voted, more than two-thirds, 64%, voted for a unified SRO.

The Securities Industry and Financial Markets Association (SIFMA) had endorsed the proposal to unite the NASD and NYSE rulemaking arms after it was announced on November 28. SIFMA’s Co-CEO, Marc Lackritz, says in a January 22 celebratory announcement: “This is a pivotal victory which will deliver a more effective and efficient regulatory environment — a win for investors and for the financial industry.”