Pacific Exchange Board Approves Demutualization Plan

The Pacific Exchange (PCX) has become the first U.S. securities market to move formally toward a for-profit, corporate structure. A proposal approved by its Board of Governors demutualizes the Exchange's equities business and reorganizes it as a wholly owned corporate subsidiary. The proposal requires approval from PCX members and from the Securities and Exchange Commission, which is expected later this year. "We're going to run the equities business as a for-profit business," said PCX Chairman and CEO Philip D. DeFeo. "Our new subsidiary, PCX Equities, Inc., will be more nimble, more agile, and more competitive. We are positioning our equities business to be able to raise capital in the public market, which it cannot do now. It will be cheaper and more accessible for retail and institutional firms. And it will be more attractive to potential strategic alliances." The Exchange sent the equities proposal to its members, with proxy voting scheduled for completion by October 4.