April 13, 2007
The merger between the NASD and NYSE regulatory arms involved at least indirectly a great deal of money. It was never clear who the ultimate financial beneficiaries of the merger would be. The explanations given by the NASD to its members raised in my mind more questions than those explanations answered. For this reason I voted against the merger.
The NASD now comes before the SEC asking to amend its bylaws to accommodate the agreements made antecedent to the merger. Among these changes are the effective elimination of voting by the members for the governing officials. The majority of the governing body will be appointed by the governing body itself. That leaves an unelected body with access to very large sums of money for funding its activities (and compensating itself). Inevitably, this unelected body will express and implement its own will, not that of the nominal members.
If there are no vested financial interests in the proposed merger, why would the need to eliminate voting be present anyway? Why not let all of the governing officials be elected?