1、Third ICAC Symposium The New York Stock Exchange A Regulator and a Listed Company James F. Duffy Executive Vice President & General Counsel NYSE Regulation, Inc.,2,Third ICAC Symposium,Effective March 7, 2006, New York Stock Exchange, Inc. merged with Archipelago Holdings, Inc. to create a new compa
2、ny named NYSE Group, Inc. NYSE Group owns two registered national securities exchanges, New York Stock Exchange LLC and NYSE Arca.,3,Third ICAC Symposium,NYSE Group, Inc.,New York Stock Exchange LLC,NYSE Market, Inc.,NYSE Regulation, Inc,NYSE Arca, Inc.,4,Third ICAC Symposium,NYSE Regulation, Inc. p
3、rovides regulation for both registered exchanges, New York Stock Exchange LLC and NYSE Arca.,5,Third ICAC Symposium,IndependentNot-for-profit,NYSE MarketsFor-profit,6,Third ICAC Symposium,NYSE Group common stock is listed for trading on the New York Stock Exchange. As a result, NYSE Group must meet
4、the financial and corporate governance standards required of NYSE listed companies.,7,Third ICAC Symposium,NYSE lists the companies traded on the Exchange, and oversees their compliance with financial and governance standards. Financial standards to become listed. Financial standards to remain liste
5、d. Traditional corporate governance standards: Focused on disclosure of material information, shareholder approval of significant issuances of additional stock, and audit committee requirements.,8,Third ICAC Symposium,Enhanced corporate governance standards adopted in 2003: Increase the role and aut
6、hority of independent directors Majority of board must be independent* Non-management directors must meet in regular executive sessions without management Listed companies must have audit, nominating and compensation committees, each comprised solely of independent directors* Listed companies must h
7、ave and disclose corporate governance guidelines and a code of business conduct and ethics Shareholders must have an opportunity to vote on all equity compensation plans, with limited exceptions * Controlled companies are exempt from requirement to have majority-independent board and fully independe
8、nt nominating and compensation committees,9,Governance of the NYSE Member-owned Exchange was initially governed only by members. In 1970 the board was changed to half members, half non-members. Constitutional amendments adopted in late 2003 established a completely independent board and strictly sep
9、arated the oversight of regulation from the business activities of the Exchange. 2006 demutualization created a publicly-owned holding company, NYSE Group, Inc., with separate subsidiaries for market and regulatory functions. As a listed company, NYSE Group complies with all corporate governance lis
10、ting standards, plus more . . .,Third ICAC Symposium,10,Governance of the NYSE - continued All elected directors of NYSE Group are independent from NYSE management, member organizations and listed companies. The only NYSE officer serving on the NYSE Group board is the CEO. NYSE Group has separated t
11、he positions of Chair and CEO. On the SRO subsidiaries, directors chosen by member representatives provide the “fair representation” of members required by law. Advisory Committees provide the Directors with input from various Exchange constituents, including floor and upstairs members, listed compa
12、nies, and institutional and retail investors.,Third ICAC Symposium,11,Governance of the NYSE continued The regulatory subsidiary is NYSE Regulation, Inc. Its independence is enhanced by Not-for-Profit status All elected directors are independent from management, members and listed companies A majori
13、ty of the board is comprised of directors who serve on no other NYSE board CEO of NYSE Regulation reports only to the NYSE Regulation board. Regulatory fees and fines may be used only by NYSE Regulation.,Third ICAC Symposium,12,Third ICAC Symposium,A word about SOX - Sarbanes-Oxley legislation adopt
14、ed in 2002 strengthened investor confidence by reforming corporate governance and financial disclosure. Established the PCAOB to regulate the accounting profession. Mandated that public companies and their independent auditors attest to the quality of the companies internal controls (Section 404). T
15、he way the requirements of Section 404 were implemented is perceived to have resulted in substantial cost and duplication of effort. We believe that costs can be reduced by embracing risk-based reviews, coupled with a regimen in which a full baseline review is conducted every third year, with intervening annual reviews focusing on high materiality, high risk areas.,Third ICAC Symposium The New York Stock Exchange A Regulator and a Listed Company James F. Duffy Executive Vice President & General Counsel NYSE Regulation, Inc.,
