NYSE Proposes Regulatory Alliance with NASD

The New York Stock Exchange has proposed that the NASD form a joint venture with it, in an effort to equally regulate brokerage firms, according to The Wall Street Journal.

John Thain, Big Board CEO, commented that this type of synergy "is the right way" to do away with unnecessary rules and exams that brokerage firms are facing at the present time.

On the other hand, the NASD sees things a little differently. The brokerage watchdog believes that the fact that NYSE has decided to become a for-profit firm should keep it from the supervisory loop, due to the potential for conflict of interest.

A move like this would allow the NYSE to independently regulate trading in its own market, while the NASD would continue regulating all other markets, including Nasdaq.

"Any improved regulatory model must be free of the inherent conflicts of both owning and regulating a for-profit exchange," said an NASD spokeswoman.