One SRO Sheriff Slated for Securities Industry
Soon there will be only one sheriff in town. On January 21, 2007, the NASD announced that its member firms overwhelmingly approved necessary by-law changes to merge the regulatory bodies of NASD and NYSE into one self-regulatory organization (SRO). As a result, there will be one SRO for all securities brokers and dealers doing business with the public in the United States.
The NASD applauds the change as “a critical step toward ending duplication, reducing inefficiency and strengthening the competitiveness of American markets.” Most NASD member firms agree, with 64 percent of the member firms voting supporting the by-law change. The new SRO – to be named later – will bring together around 2,400 NASD staffers and 470 NYSE enforcement personnel.
Critics of the merger believe that investors are better protected by more regulators and competition among them. In an article in On Wall Street Magazine, Edward Siedle, president of Benchmark Financial Services, compares the NASD-NYSE deal to “a merger of Laurel and Hardy: You have two incompetent bumbling, almost comedic organizations calling themselves self-regulators and now you’re going to merge them?”
