The interim chairman of the New York Stock Exchange, John Reed, has unveiled his plans to restructure the troubled institution, proposing a fully independent eight-member board of directors and nominating figures such as Madeleine Albright, the former US secretary of state, and Sir Dennis Weatherstone, a former executive of JP Morgan.
Mr Reed, a former joint CEO of Citigroup who came out of retirement to take the helm at the NYSE following the September resignation of Dick Grasso amid a salary scandal, is asking its 1,366 members to vote on his proposals by 18 November.
His blueprint would, in effect, rob the investment banking community of control over the Exchange. All members of the existing board, heavily criticised for rubber-stamping a $188m (£112m) pay package for Mr Grasso, have been asked to step down.
The proposal aims to resolve conflict-of-interest problems at the Exchange. The independent board would take charge of regulatory matters as well as setting compensation.
A separate board of advisors, with members drawn mostly from Wall Street, will oversee daily operations and other issues such as listing standards.
"These are proposals that I think will be viewed as a significant change.
"We are proposing the creation of a totally independent set of directors," Mr Reed said. "It makes me comfortable that the chance of another breakdown in corporate governance is extremely small."
Meanwhile, no plans have been laid to replace the old-fashioned outcry system of floor trading with an electronic system. Some outsiders had hoped Mr Reed would use his reforms to begin that change.
The Securities and Exchange Commission, which must approve the plan, praised the initiative as a "substantial and critical first step" but added that "additional reforms beyond the proposal put forth today will likely be considered".
The only members from the old board nominated to the new board are Ms Albright and Herbert Allison, the chairman of the pension fund giant TIAA-CREF. The six other nominees are: Sir Dennis; Euan Baird, the retired head of oilfield services company Schlumberger; Robert Shapiro, the retired head of Monsanto; Marshall Carter, the retired head of fund management at State Street; Shirley Anne Jackson, the head of Rensselaer Polytechnic Institute; and James McDonald, the chief executive of Rockefeller & Co.
Separately, Deutsche Bank has became ensnarled in the burgeoning mutual funds crisis on Wall Street. The New York Attorney General, Elliot Spitzer, subpoenaed the bank for information about possible assistance given by its brokers to customers to help them make illegal trades in mutual fund shares after market hours.Reuse content