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Securities Regulation: Oversight of SRO's Listing Procedures Could Be Improved

GGD-98-45 Published: Feb 06, 1998. Publicly Released: Feb 17, 1998.
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Highlights

Pursuant to a congressional request, GAO reviewed the National Association of Securities Dealers' (NASD) automated quotation (NASDAQ) SmallCap Stock Market and the events surrounding the listing of Comparator Systems Corporation stock.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
United States Securities and Exchange Commission The Chairman, SEC, should require OCIE to periodically report the status of all open, significant recommendations to the Commissioners.
Closed – Implemented
SEC agreed with GAO's recommendation and has implemented it by providing a report to the Commissioners detailing any open significant recommendations from previous SRO inspections. SEC plans to continue to provide such a report to the Commissioners on a periodic basis, and has informed the SROs of the new procedure.
United States Securities and Exchange Commission The Chairman, SEC, should require NASD to develop management reports based on overall program statistics that demonstrate its Listing Department's operating results, such as the number of companies granted exceptions to listing and maintenance requirements along with their ultimate disposition, and to submit this data periodically to the Commissioners for review.
Closed – Implemented
GAO recommended that the National Association of Securities Dealers develop management reports based on overall program statistics that demonstrate its Listing Department's operating results, and GAO recommended that Nasdaq submit this data periodically to the Commission for review. Nasdaq has committed to produce quarterly management summary reports based on overall program statistics beginning with the quarter ending June 30, 1998. Nasdaq issued its first management report on August 27, 1998. Nasdaq believes that these reports will assist Nasdaq in ensuring that listing standards are being enforced, and that they will also assist the Commission's staff in its routine inspections of Nasdaq's listings program.

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Topics

Brokerage industrySecurities fraudSecurities regulationSelf-regulatory organizationsStock exchangesStocks (securities)SecuritiesStock marketStatistical dataFinancial instruments