The Securities and Exchange Commission today voted to approve changes to the governance structure of the New York Stock Exchange.

On November 7, the NYSE filed a proposal with the commission to amend and restate its constitution to implement a series of governance changes.

Among the changes approved today:

  • The NYSE board of directors will be reduced from 24-27 members to between 6-12 independent members, plus the chairman of the board and CEO.
  • The Board of Executives will be created as an advisory board, consisting of the chairman and the CEO, and at least 20, but no more than 25 members who will serve for one-year terms. Its members will include representatives of the Exchange’s various stakeholders, including member firms, institutional investors, and listed companies.
  • The position of Chief Regulatory Officer will be created to oversee the NYSE’s regulatory function.
  • Four standing committees, consisting only of independent directors, will be created to oversee certain critical functions.

The Securities Industry Association applauded the SEC for taking steps to improve the Big Board’s corporate governance.

The SEC also decided to propose amendments that would require a mutual fund to provide enhanced disclosure regarding breakpoint discounts on front-end sales loads.

It says this enhanced disclosure would assist investors in understanding the breakpoint opportunities available to them.

The proposals would require mutual funds to:

  • provide a brief description in its prospectus of arrangements that result in sales load breakpoints;
  • describe in its prospectus the methods used to value accounts in order to determine whether a shareholder has met sales load breakpoints;
  • state in its prospectus that in order to obtain a breakpoint, it may be necessary for a shareholder to provide information and records, such as account statements, to a mutual fund or financial intermediary; and
  • state in its prospectus whether it makes available on its website information regarding its breakpoints.

“Today’s steps by the commission are important in rebuilding the public’s trust and confidence,” said George Kramer, SIA’s acting general counsel.