NYSE can police itself, its new top regulator says

January 10, 2004|By BLOOMBERG NEWS

NEW YORK - Richard Ketchum, the CitiGroup Inc. legal officer just named the New York Stock Exchange's new top regulator, says he can convince U.S. institutional investors that the world's biggest stock market can police itself.

"I have a profound commitment to self-regulation," Ketchum, 53, told reporters late Thursday, hours after being appointed to the new post of chief regulatory officer. "The first thing I can do is make it work."

U.S. pension funds say the NYSE's integrity as an enforcer is compromised because it's a marketplace owned by its members. A board comprising Wall Street executives and companies regulated by the exchange paid then-Chairman Richard Grasso $188 million.

"It isn't a question of who they put in the regulator's job," said Cynthia Richson, corporate governance officer at the Ohio Public Employees Retirement System. "It's a question of independent regulation."

The exchange has functioned since the 1930s as a self-regulatory organization, or SRO, overseeing the governance of its 1,366 members. Grasso's ouster in September highlighted lax regulation and conflicts of interest on the NYSE board.

Interim Chairman John S. Reed created Ketchum's post - he takes over in June from Edward Kwalwasser - to combat criticism of its regulatory role. Reed also replaced a 27-member NYSE board dominated by Wall Street executives with a board of eight members, none from the securities industry.

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