Summary
This 8-K filing from The Nasdaq Stock Market, Inc. (Nasdaq) details a significant operational and governance shift that occurred on December 20, 2006. The company entered into a transitional system and regulatory services agreement with the National Association of Securities Dealers, Inc. (NASD). This agreement effectively transfers certain market operations for non-Nasdaq listed securities from NASD's delegation to Nasdaq's subsidiary, The NASDAQ Stock Market LLC (Exchange). Crucially, this transition also marked the end of NASD's voting control over Nasdaq, which was previously held through ownership of Nasdaq's Series D Preferred Stock. The Series D Preferred Stock has been redeemed by Nasdaq. This development clears the path for Nasdaq to begin operating as a full exchange for trading non-Nasdaq listed securities, a transition expected to occur in the first quarter of 2007. For investors, this signals a move towards Nasdaq operating with greater independence and expanded market capabilities.
Key Highlights
- 1Nasdaq subsidiary, The NASDAQ Stock Market LLC, entered into a transitional system and regulatory services agreement with NASD on December 20, 2006.
- 2The agreement shifts certain market operations for non-Nasdaq listed securities from NASD delegation to Nasdaq's subsidiary.
- 3NASD's voting control over Nasdaq, previously exercised through Series D Preferred Stock, has ended.
- 4Nasdaq redeemed the one outstanding share of Series D Preferred Stock held by NASD for $1.00.
- 5Nasdaq is no longer a party to the NASD Plan of Allocation and Delegation of Functions.
- 6This transition allows Nasdaq to operate as an exchange for trading non-Nasdaq listed securities.
- 7Nasdaq anticipates becoming operational as an exchange for these securities in Q1 2007.