Post by jannikki on Dec 11, 2006 18:38:15 GMT -4
NASD merger battle heats up
By Dan Jamieson
December 11, 2006
NASD has blasted the Financial Industry Association's effort to collect votes against bylaw changes needed to consolidate NASD and NYSE regulatory units.
In a message sent Friday evening, NASD told member firms that the FIA wanted firms to "forfeit your right to change your vote."
The unsigned message from NASD said asking for irrevocable proxies was an "unusual request."
The FIA, based in Longwood, Fla., began a campaign last week to collect irrevocable proxies from NASD member firms, giving FIA officials the right to vote members' ballots on the pending bylaw changes.
Those changes were approved by the NASD board last week.
Details of the changes and ballots are expected to hit brokerage firms' mailboxes this week.
"We think it's really important for members to wait until they receive the NASD's proxy material before making a decision," said Howard Schloss, an NASD spokesman.
"By signing [the FIA power of attorney], they may very well be preventing themselves from changing their minds after getting the material."
John Busacca, president of North American Clearing Inc. in Longwood, and one of the founders of the FIA, said the group's proxy form was drafted by a Delaware attorney, where NASD is incorporated.
He said NASD itself, in an effort to rush the consolidation through, would take away firms' right to vote for the majority of the new SRO's board members.
The FIA is declining to disclose the number of proxies it now controls.
Mr. Busacca said some member firms were reluctant to sign over their votes, but indicated that they intended to vote against the bylaw changes.
NASD is urging members to support the consolidation, arguing that the move would improve efficiency and allow members to retain a voice on the new SRO.
Mr. Schloss pointed out that NYSE members lost their industry representation.
"There is every chance the SEC could take action if this plan fails," he said.
www.investmentnews.com/news.cms?newsId=3154
By Dan Jamieson
December 11, 2006
NASD has blasted the Financial Industry Association's effort to collect votes against bylaw changes needed to consolidate NASD and NYSE regulatory units.
In a message sent Friday evening, NASD told member firms that the FIA wanted firms to "forfeit your right to change your vote."
The unsigned message from NASD said asking for irrevocable proxies was an "unusual request."
The FIA, based in Longwood, Fla., began a campaign last week to collect irrevocable proxies from NASD member firms, giving FIA officials the right to vote members' ballots on the pending bylaw changes.
Those changes were approved by the NASD board last week.
Details of the changes and ballots are expected to hit brokerage firms' mailboxes this week.
"We think it's really important for members to wait until they receive the NASD's proxy material before making a decision," said Howard Schloss, an NASD spokesman.
"By signing [the FIA power of attorney], they may very well be preventing themselves from changing their minds after getting the material."
John Busacca, president of North American Clearing Inc. in Longwood, and one of the founders of the FIA, said the group's proxy form was drafted by a Delaware attorney, where NASD is incorporated.
He said NASD itself, in an effort to rush the consolidation through, would take away firms' right to vote for the majority of the new SRO's board members.
The FIA is declining to disclose the number of proxies it now controls.
Mr. Busacca said some member firms were reluctant to sign over their votes, but indicated that they intended to vote against the bylaw changes.
NASD is urging members to support the consolidation, arguing that the move would improve efficiency and allow members to retain a voice on the new SRO.
Mr. Schloss pointed out that NYSE members lost their industry representation.
"There is every chance the SEC could take action if this plan fails," he said.
www.investmentnews.com/news.cms?newsId=3154