Mr. Ketchum, in 12 years at the NASD and Nasdaq, had served as President of Nasdaq for three years and of NASD for seven years. Earlier he was at the SEC for 14 years, eight as Director of the Division of Market Regulation. Since June 2003, Mr. Ketchum has been General Counsel of the Corporate and Investment Bank of Citigroup Inc., and a member of the unit's Planning Group, Business Practices Committee and Risk Management Committee.
Mr. Carter said: "In Rick Ketchum we have found the outstanding leader for the NYSE Regulation function. In addition to his integrity, intelligence, managerial experience and an unparalleled understanding of securities markets, we welcome his commitment to a regulatory environment that assures confidence in those markets by all participants, from individual investors to the regulated broker-dealers. We expect him to build on the experience base of the Exchange as a self-regulatory organization to further raise standards and to engage with other regulatory bodies to encourage consistency and best practices in all markets."
Mr. Carter said that Mr. Ketchum's annual base compensation has been set at $600,000 and a targeted bonus of $600,000. Until Mr. Ketchum assumes his responsibilities, the Regulatory function will continue to be directed by Edward Kwalwasser, Group Executive Vice President-Regulation, who has announced his plans to retire effective October 1, 2004.
Mr. Ketchum stated: "I am honored to be chosen by the New York Stock Exchange for this important post. Believing passionately in self-regulation and market integrity, I look forward to contributing to the Exchange's role in serving the investor community."
Also at the meeting the Board authorized Mr. Reed to proceed with two initiatives. One, as agreed with the Exchange's Board of Executives, is to create a task force drawn broadly from the industry to study the current market structure and trends likely to affect it. The second is an independent review of the Exchange's capabilities as a self-regulatory organization, specifically focusing on floor operations and the organizational capacity for responding to surveillance alerts.
The Board approved the engagement of L. Edward Shaw to direct the independent review. Mr. Shaw is a well known financial institution executive and securities lawyer, most recently with Aetna Inc. and earlier with National Westminster Bank Plc's NatWest Markets, North America; The Chase Manhattan Corporation and The Chase Manhattan Bank, N.A; and Milbank Tweed Hadley & McCloy.
"We have set ambitious goals for Regulation, including for stepped-up assessment of risk and emerging issues, enhanced technological support and training, and improved communications," said Mr. Carter. He noted that the 2004 Regulatory budget approved the hiring of 43 people to bring staffing to 650.
The NYSE is the SEC-designated examining authority for the major securities firms in the United States, including more than 250 member firms that deal with the public and account for more than 85 percent of customer accounts handled by broker-dealers. NYSE Regulation, consisting of Member Firm Regulation, Market Surveillance and Enforcement divisions, has a budget of more than $150 million.
