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New York Stock Exchange to Separate Chairman, CEO Posts

The SEC approves its reform package with that addition.
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Securities and Exchange Commission

approved the package of

New York Stock Exchange

governance reforms proposed by its interim chairman, John Reed, and adopted an additional plan to separate the positions of chairman and chief executive of the exchange.

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The proposals, whose centerpiece is a smaller and more-independent board of directors, were approved by NYSE member firms last month. The SEC vote followed comments by Chairman William Donaldson, who praised the reform as "far-reaching both in its purpose and scope."

Donaldson alluded to the messy ouster of Richard Grasso in supporting the chairman/CEO bifurcation.

"Given the unfortunate experience of the recent past, however, I believe it is highly preferable -- and I have expressed this opinion to the exchange -- that the positions of chairman and CEO be held by two different people, at least in the near term," he said. "In this way, the NYSE should be in a better position to protect against the concentration of too much executive authority in one individual."

While the changes would streamline the regulatory structure at the exchange and remove securities industry executives from the day-to-day governance, they leave intact the system of floor-based specialists that some see as the NYSE's bigger problem.

The nation's biggest pension system, Calpers, sued the exchange and its specialists on Tuesday, alleging they have systematically looted investors out of millions and possibly billions of dollars via various schemes.