The conflicting roles of the new New York Stock Exchange

Author： Kramer George R. Sorcher Alan E.

ISSN： 1528-5812

Source： Journal of Investment Compliance, Vol.7, Iss.3, 2006-07, pp. : 51-66

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Abstract

Purpose ? To examine whether the New York Stock Exchange (NYSE) in its recent rule changes has provided the appropriate separation between its supervisory authority and the management of the Exchange. Design/methodology/approach ? Describes the regulatory and governance structure proposed by the NYSE in connection with its public offering; discusses policy objections the security industry has made to the proposal, reviews responses by the NYSE and the Securities and Exchange Commission (SEC) to those objections; and discusses what steps might be on the horizon to better rationalize the regulatory and business side of the new for-profit NYSE. Findings ? The NYSE's proposal should provide for regulatory consolidation with the NASD. The proposal heightens the conflict between a for-profit exchange and its regulatory function. The proposal governance structure ignores the fact that NYSE LLC is the Exchange and has plenary authority over NYSE regulation. The proposal does not provide fair representation for members. The proposal does not provide appropriate treatment of market data. Originality/value ? Provides a comprehensive view of recent changes to the NYSE's regulatory and governance structure and issues raised by the securities industry in response to those changes.