With the completion of Phase 2 of its offering, the
National Association of Securities Dealers is now in a
minority position so it can “return to its historical role
of regulating the Nasdaq, dispute resolution and offering
its technology to new customers,” according to Bob Glauber,
Glauber also said the Nasdaq “is committed to vote its shares (the 40% minority) in the same way as the majority “so there is no voting control” by the NASD.
Zarb said shares were not offered outside “the inner circle” of the Nasdaq in order “to align interests of customers, issuers and owners of the exchange.” However, since the first two tranches were completed, there has been “material interest” shown by “other serious interested investor groups” over the last several days who indicated an interest in making private investments in Nasdaq, Zarb said. Those offers will be considered by Nasdaq’s board, which may necessitate the offering of another tranche, he said.
With 40% of the shares owned by the NASD, Glauber said the NASD wants to sell down its minority interest subject to market conditions. “A reduction in NASD shares should be rapid in the months ahead,” he said
With the Nasdaq shares now in the hands of its members, listed companies and customers, the Nasdaq board appointed Frank Baxter, chairman of Jefferies & Co., to head a committee charged with investigating the possibility of a public IPO.
But whether public ownership is the right path is still open to question. According to Baxter, the IPO process must weigh the different interests of issuers, and members “to maximize value for all concerned. We will do it with all dispatch, but we will do it all very deliberately.” No date was set for when, if ever, an IPO plan would be announced.
While the Nasdaq’s ownership has changed, the NASD regulatory body will continue to be a membership organization. This is to ensure that the NASD will “be as pure and clean as the driven snow,” according to Zarb.
He also said Nasdaq must become an exchange for the NASD to eliminate any conflict of interest possibility. There must be a separation, “otherwise the NASD is living in sin,” Zarb said.
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