The Securities and Exchange Commission voted this week to open to public comment proposed new rules related to the governance, transparency, oversight and ownership of the stock exchanges.

Under one proposal, the exchanges would have to have a majority of board members independent of management, as well as fully independent nominating, governance, audit, compensation and regulatory oversight committees. They would also require each to separate their regulatory function from their business operations.

Under provisions aimed at improving transparency, the exchanges would have to publicly disclose, and update at least annually, certain information about their operation and structure, including their governance processes, regulatory programs, financial condition and ownership. They would also have to submit quarterly and annual reports to the commission related to the operation of their regulatory programs, including their examination, investigation and enforcement activities.

Another proposal would restrict the ownership and voting levels of members that are broker/dealers to no more than 20 percent of an exchange, and would require them to report information about any significant accumulations of exchange ownership interests and voting power to the SEC.

The commission also voted to issue a concept release requesting public comment on issues relating to the efficacy of the self-regulatory system, including its strengths and weaknesses. Comments on the proposed rules are due within 45 days of publication in the Federal Register, while comments on the concept release are due 90 days from the date of publication in the Federal Register.

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