NYSE will continue to govern itself
SEC's Donaldson: NYSE should match its own standards
By Leticia Williams, CBS.MarketWatch.com
Last Update: 12:20 PM ET Oct. 15, 2003
WASHINGTON (CBS.MW) -- Self-regulatory organizations such as The New York Stock Exchange should be held to the same governance standards it has for its listed companies, Securities and Exchange Commission Chairman William Donaldson told lawmakers Wednesday.
"Just as SROs (self-regulatory organizations) have demanded that their listed companies strengthen their governance, we must demand that, at a minimum, SROs match the standards that they set for listed companies," Donaldson said.
However, the SEC is leaving it to the NYSE to evaluate its own governance rules and recommend changes that are to be reviewed and approved by the SEC.
The current state of self-regulation has been called into question recently, Donaldson said, in light of events at the NYSE. Dick Grasso, former NYSE chairman, resigned in recent weeks amid controversy over his $140 million compensation package.
But the responsibility to oversee the structure of the NYSE is that of the stock exchange itself, Donaldson said.
Donaldson was on Capitol Hill testifying before the Senate Banking Committee at a hearing on a wide-range of issues regarding market structure.
Status of Nasdaq application
Separately, lawmakers questioned Donaldson about when the SEC would issue its long-awaited decision on Nasdaq's application to become a registered stock exchange.
Nasdaq's application has been an issue before the SEC for about two years. Donaldson said the delay has been due to broader implications to the markets the application may represent, such as the issue of whether price protection within a market should be a requirement of exchange registration.
"There's nothing that we're looking at now that has a higher priority," Donaldson said, when asked by lawmakers when the SEC would make a decision on Nasdaq's application to become a stock exchange. Donaldson did not give any specific time frame for the pending decision.
He also said the SEC is going to take a "good hard look" at market trade-through rules which prevent electronic trades from happening instantaneously, and the problem of access fees markets charge for sharing quotes.
Other market issues the SEC is looking at are hidden transaction fees not included in displayed quotes, the way market data is displayed and distributed, and the resulting revenues allocated among the markets.
Leticia Williams is a reporter for CBS.MarketWatch.com in Washington. |
