FIA Urges NASD Committees to Revise Merger

Small broker/dealer firms are trying to slow the proposed merger between the NASD and NYSE Regulation, saying that it’s being pursued too hastily and the consequences are not clear. In a letter to NASD committee members, the Financial Industry Association (FIA), which represents small firms, urged them to sign a petition to slow the merger process. The petition also requests that the NASD provide member firms with more detailed information about the proposed merger and more time to consider its merits.

Small broker/dealer firms are trying to slow the proposed merger between the NASD and NYSE Regulation, saying that it’s being pursued too hastily and the consequences are not clear. In a letter to NASD committee members, the Financial Industry Association (FIA), which represents small firms, urged them to sign a petition to slow the merger process. The petition also requests that the NASD provide member firms with more detailed information about the proposed merger and more time to consider its merits.

“It is unfair to force a merger vote down the members’ throats without sufficient information, contracts, impact studies nor a real viable reason to change our voting rights that we have held for 67 years,” John Busacca, president of North American Clearing and FIA founder, wrote in the letter, which was obtained by Registered Rep. Busacca said 25 signatures should be enough to send a strong message to the NASD board of governors. Calls to NASD spokespeople were not returned at press time.

The petition follows FIA director Richard Goble’s appeal to all NASD member firms to vote “no” on the merger. The FIA, a trade group of more than 1,000 small brokerage firms, has been raising a stink over the lack of small-firm representation on the NASD Board of Governors, its National Adjudicatory Council and its District Business Conduct Committee. Wielding the one-firm, one-vote provision of the securities industry bylaws, the FIA has successfully won 21 out of a possible 33 seats on NASD district committees and two seats on the board.

But FIA members fear that approving the merger would signal the death knell for equal representation. Under terms outlined last week, the NASD-NYSE Regulation merger would amend the electoral process for the new SRO’s board. The proposal would let small firms—those with 150 or fewer registered persons—vote only small-firm candidates to the board. At present, NASD firms get one vote per firm for each board representative.

The NASD has argued that the proposed structure affords small firms three seats on the board, as opposed to the one they are guaranteed under the current model. “All we are asking the NASD to do is to slow down and be transparent and open before they take away our right to vote,” Busacca writes.

For more on the FIA’s saber rattling over the proposed merger click here:

http://registeredrep.com/news/small-firms-against-merger/

http://registeredrep.com/mag/finance_sec_chairman_endorses/

http://registeredrep.com/regulatory/finance_fight_club/index.html
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