Source: Boston Stock Exchange
The Boston Stock Exchange (BSE) announced today that it will restructure by demutualizing.
The process will convert the Boston Stock Exchange to a for-profit entity.
"We don't think of demutualization as a means to an end, but rather planning and execution has been our focus to successfully bring products and services to the market," said Mike Curran, CEO of the Boston Stock Exchange. "The BSE has always been an innovator and incubator with a '172 year-old start-up' mentality. Demutualization will now help to support our long-term strategy."
The Boston Stock Exchange has focused on building a new technology platform in anticipation of Reg NMS and its entry into the National Market System. The technology allows for regulatory requirements to be built into the all-electronic platform. During this time, many other exchanges focused on completing the demutualization process.
We have watched the recent wave of demutualization by Exchanges and have learned from each one so that we come to this process with an excellent plan in place," said Steve Barrett, vice chairman of the Boston Stock Exchange. "Recent regulatory changes have created a level playing field in which the BSE can be an active and nimble participant in the national market structure."
The Exchange will shift from a member-owned organization to a wholly-owned subsidiary of the holding company (BSE Holdings Inc.). As part of the demutualization, the Exchange will be owned by its stockholders. The current members of the BSE will receive shares of common stock of the new holding company in exchange for their membership. The Boston Stock Exchange expects the demutualization to be complete in 2007.
"As a long-time member, I am excited for the demutualization," said Art Hogan of Jefferies & Co., a member representative of the Board. "The new structure will allow for the continued focus on the customer while opening new opportunities for innovation in this rapidly changing environment."