This excerpt taken from the NDAQ DEF 14A filed Aug 22, 2005.
Description of the Holdco Amendments
The Holdco Amendments are primarily composed of conforming amendments to reflect the fact that upon exchange registration Nasdaq would no longer derive regulatory authority from NASD, as is currently the case, and would not function as a self-regulatory organization in its own right. Instead, Nasdaq would have an obligation to act in a manner that would not impede the regulatory obligations of Exchange LLC. Specifically, in circumstances where Nasdaq is currently required by its Certificate of Incorporation to consider the impact of certain actions on the regulatory obligations of Nasdaq as a facility of NASD, Nasdaq after exchange registration and effectiveness of the Holdco Amendments would be required to consider the impact of such actions on Nasdaq, Exchange LLC and other operations of Nasdaq and its subsidiaries. In addition, the Holdco Amendments contain provisions providing that the Nasdaq Board will allow the board of directors of Exchange LLC to review proposed changes to the Certificate of Incorporation and Nasdaqs By-Laws to determine whether these changes must be filed with the SEC as proposed rule changes pursuant to Section 19 of the Exchange Act. The Holdco Amendments also delete references to NASD and to the Plan of Allocation and Delegation of Functions by NASD to Subsidiaries because Nasdaq will no longer be operating under such plan. The Holdco Amendments also make conforming changes to the Voting Preferred Stock. Currently, the Voting Preferred Stock loses its voting rights upon Nasdaqs registration as a national securities exchange. The Holdco Amendments would terminate the voting rights of the Voting Preferred Stock upon registration of Nasdaq or a wholly-owned subsidiary of Nasdaq as a national securities exchange. Unlike the remainder of the Holdco Amendments, the amendment related to the Voting Preferred Stock (the Termination Amendment) would be filed with the Delaware Secretary of State and would take effect in advance of exchange registration.