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November 1, 2003

NYSE Stands Up for Itself

By Gregory Bresiger

The current system of self-regulation has its problems, but there is no reason why it can't be reformed and work. Those were the assertions of acting NYSE Chairman John Reed, recently testifying before the U.S. House Financial Services Committee.

"We, in the New York Stock Exchange, are good regulators. We're not perfect regulators. There are things that will need to be corrected," according to Reed. He also added that effective reform can be carried out by the NYSE. Reed argued that - to avoid conflicts of interest - the board should be "essentially" independent. But Reed also stressed that Big Board doesn't need radical change.

"I do not think there is any reason to believe that you need to change the regulatory structure because of its ability to operate," he said. "I think it can operate well in its current configuration." Reed also stressed that, while the auction system can be improved, it still "serves investors well."

Reed said that he is working on a series of corporate governance proposals. They should be ready in the next few weeks, he said.