By James Langton
(September 2) – After boldly declaring its intention to demutualize by U.S.
Thanksgiving, it appears the New York Stock Exchange is backing away from those plans, or at least that timetable.
The NYSE held a board meeting today and did not vote on whether to proceedwith an IPO.
After considering a report prepared by Merrill Lynch & Co. Inc. on a pro bono basis the NYSE decided that it would “continue down track” toward demutualization, according to chairman Richard Grasso. But in this environment it appears that any IPO will be put off until 2000 at the earliest. It did announce that Merrill’s report will not be released.
Since the NYSE announced its desire to demutualize, a couple of stumbling blocks have cropped up. For example there will be tax implications for seatholders, and the Securities and Exchange Commission needs to give its approval.
The SEC has expressed concern about the prospect of a for-profit exchange regulating itself. The NYSE didn’t have any comment on the tax issue, or the possibility of spinning off its regulatory function to facilitate an IPO, except to say that it is studying all these issues.