NEW YORK (AP) -- Companies that want to be listed on the New York Stock Exchange or Nasdaq Stock Market would have to meet tougher accounting and governance standards under newly proposed rules.
Although it could be months before any changes take effect, the nation's two biggest stock markets wanted the public to know that they were acting to prevent future accounting debacles like the one that brought down Enron Corp. The two exchanges announced the proposals Thursday.
The move follows calls for reform made earlier this year by Securities and Exchange Commission Chairman Harvey Pitt. The collapse of Enron and accounting questions about several other companies, including Global Crossing and Tyco, have raised questions about whether corporate boards and outside auditors were doing their jobs.
The separate proposals put forward Thursday by the Nasdaq and NYSE overlapped in many areas, including the need for more independent directors on corporate boards and tighter audit procedures.
But there were a few differences, particularly in the area of stock options -- the practice of compensating employees with shares of stock.
The NYSE wants to require shareholder approval of all stock option plans. The Nasdaq would require approval for stock option plans for officers and directors, but not those for rank-and-file employees.
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