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Members of the

National Association of Securities Dealers

voted Friday to convert the


stock market into a for-profit company via a private placement.

The vote was approved by 3,423 members, or 84% of the total, and rejected by 652 members, or 16%. There were 110 abstentions.

The sale will take place in a two-step process, with a first block of stock and warrants -- about 47% to 49%, on a fully diluted basis, of the Nasdaq -- to be sold to brokerages, companies and institutional investors, hopefully by the end of May. The second block of stock is expected to be sold by the end of September.

The restructuring approval comes a day after a New York court denied the effort of a

renegade NASD board member, Alan Davidson, of

Zeus Securities

, to block Friday's vote.

The NASD's move Friday will help Nasdaq confront the challenge of the many electronic markets that are taking away business and fragmenting trading.

The move makes less likely any possible merger between the NASD and the

New York Stock Exchange

. Earlier this year, NASD rejected an overture by the NYSE.