The U.S. Securities and Exchange Commission on Wednesday approved a reorganization of the New York Stock Exchange, completing the biggest policy shift at the Big Board in three decades.
The SEC endorsed a change that was adopted by the exchange four weeks ago in response to the uproar over the size of the pay package of the previous exchange chairman, Richard Grasso.
Notably, the reorganization plan will split the positions of board chairman and chief executive. The SEC chairman, William Donaldson, said the changes would “protect against the concentration of too much executive authority in one individual.”
Donaldson, a former Big Board chairman, seemed to signal his approval of the reorganization several weeks ago, when he said it would embody “every possible safeguard” to assure that exchange operations “will have absolutely nothing to do with the regulatory function and will not be compromised.”
The SEC action came about three months after the resignation of Grasso as chairman and chief executive of the stock exchange following a furor over his compensation.
Critics of the stock exchange were outraged when it disclosed in August that Grasso was to receive $139.5 million in deferred pay and retirement benefits. The critics noted that Grasso’s pay and benefits were set by some of the same people he was regulating.
Problems continue to face the exchange, however.
The California Public Employees’ Retirement System, the biggest U.S. pension fund, filed a lawsuit Tuesday against the exchange and seven specialist firms – which match buyers and sellers – contending that the exchange’s trading system had defrauded investors of millions of dollars.
The New York Times WASHINGTON The U.S. Securities and Exchange Commission on Wednesday approved a reorganization of the New York Stock Exchange, completing the biggest policy shift at the Big Board in three decades.