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April 1, 2004

Nasdaq and Big Board Tango Over Regulator

By Staff Reports

Former Nasdaq President Richard Ketchum, originally scheduled to start his top new regulatory post at the Big Board on June 1, is already on the job - three months early. The decision to move his starting date up did not come cheap - it may have cost the Big Board heavily and Ketchum himself $250,000 in salary owed to him by Nasdaq.

Still, on the positive side, it garnered Nasdaq, which has had some recent poor quarterly results, a handsome payday. Nasdaq reportedly released Ketchum from a non-compete agreement at a cost of $300,000 to the NYSE. That agreement prevented Ketchum from taking the NYSE post until June.

Neither Nasdaq nor the NYSE would comment on the financial arrangements that brought Ketchum to the NYSE.

However, Ketchum, a distinguished regulator, who'll earn a reported $1.2 million annually at the NYSE, is considered a worthy candidate. He set the tone as the NYSE's new chief regulatory officer early, telling a recent news conference he had confidence in the system of self regulation.

"I feel quite confident, after my discussions with the board [of the NYSE] that they are quite committed to provide whatever resources that we need on the regulatory side," Ketchum added.

Ketchum stressed that he will report directly to the NYSE's board. His comments came as the Big Board's five biggest specialist firms and the SEC recently reached a tentative agreement in which they agreed to pay $240 million to settle civil charges. These charges stemmed from the allegations that these firms stepped in front of customer orders on the Big Board.