NYSE, Nasdaq Urged to Review Rules

The New York Stock Exchange and Nasdaq Stock Market should consider prohibiting corporations from donating money to institutions that have ties to corporate audit committee members, a top Securities and Exchange Commission official said.

SEC Chief Accountant Robert Herdman said that, in the wake of Enron Corp.’s collapse, regulators for the two leading U.S. markets also should weigh a proposal to stop audit board members from doing consulting work for companies they oversee.

NYSE and Nasdaq are reviewing their listing requirements about audit committees as part of a broader look at corporate governance requested by SEC Chairman Harvey Pitt.

Herdman made his comments in a speech delivered March 7 and only recently released them.

The NYSE has appointed a panel to look at corporate governance issues. A Nasdaq spokeswoman said Nasdaq was “examining closely the issues mentioned by Mr. Herdman, as well as other corporate governance issues.”