NASD Board to Vote on $1-Billion Nasdaq Plan

The National Assn. of Securities Dealers’ board is expected Tuesday to unanimously approve a $1-billion-plus plan to convert the Nasdaq Stock Market into a private, for-profit company, NASD board members said.

“I don’t think there should be any opposition,” said NASD board member LaRae Bakerink, compliance director of the Pacific America Securities brokerage in San Diego.

The Nasdaq plan includes concessions made to small member brokerages by NASD Chairman Frank Zarb in an attempt to defuse their opposition to the initial proposal.

These firms had argued that the original plan, on which the board was due to vote earlier this month, favored large brokerages’ interests.

Zarb agreed to negotiate a compromise less than 24 hours before the Dec. 9 meeting.

Nasdaq’s restructuring, which Zarb wants to complete by July, would make it the first U.S. stock market to be owned by shareholders rather than member firms. The New York Stock Exchange, the world’s largest stock market, also plans to become a private corporation, though it doesn’t intend to do so at least until the end of next year.

Nasdaq, an electronic, dealer-run market, expects to raise more than $1 billion through two private placements of its stock to member brokerage firms, institutional investors and listed companies such as Microsoft Corp. and Intel Corp. The NASD, a membership organization that owns Nasdaq, plans to keep a 25% stake in the new company.

An initial public offering of Nasdaq shares could come after a board is elected by the new shareholders. NASD’s American Stock Exchange unit would not be part of the Nasdaq sale.