"This vote by the Members sends a signal to all the financial services world that the PHLX is on the leading edge of the evolution of exchange marketplaces," said Meyer S. "Sandy" Frucher, Chairman and CEO of the Exchange. "Philadelphia is creating a new paradigm - for the first time seat owners at a US stock exchange have voted to convert their seats into shares of the new stock company, a reflection of the owners and members' desire to position PHLX competitively for the future."
The Members vote on demutualization, which involves the conversion from a member-owned, seat-based institution to a shareholder-owned corporation, follows last week's approval by the seat owners of the Exchange, who voted 330 to 59 in favor of the plan. The final step in the process will involve securing approval by the Securities and Exchange Commission (SEC), following a public notice and comment period. PHLX has already submitted to the SEC its proposed rule change filing pertaining to the demutualization and will notify the Commission of the owners and members vote, pending formal certification of the vote by Grant Thornton LLP. The Exchange expects that SEC approval could be forthcoming during the first quarter of 2004. Frucher continued, "Separating ownership rights from trading rights, by creating trading permits, represents the modernization of the way exchanges must do business. By predicating our success on attracting wider participation in our market, inviting third-party investment and treating all of the trading community as customers, not captives to this Exchange, PHLX will be propelled to a leadership position in the industry."
Frucher added, "This vote is the culmination of hard-won successes over the past six years - we've revamped our governance structure, setting a precedent of majority public Board oversight of an exchange, we've developed proprietary information technology that is regarded as superior in the industry, and we are the only floor-based options exchange to increase market share in the past five years. This vote is another chapter in the proud history of the Philadelphia Stock Exchange and will sustain this institution in the years to come."
The Philadelphia Stock Exchange was founded in 1790. The PHLX trades 2,000 stocks, nearly 1,000 equity options, 14 sectors index options and currency options. For more information about the PHLX and its products, visit www.phlx.com.