This excerpt taken from the NDAQ 10-Q filed May 9, 2008.
The NASDAQ Stock Market has self-regulatory obligations and also operates for-profit businesses, and these two roles may create conflicts of interest.
We have obligations to regulate and monitor activities on The NASDAQ Stock Market and ensure compliance with applicable law and the rules of our market by market participants and NASDAQ-listed companies. The SEC staff has expressed concern about potential conflicts of interest of for-profit markets performing the regulatory functions of a self-regulatory organization. Although the Exchange outsources the majority of its market regulation functions to FINRA, we do perform regulatory functions related to our listed companies and our market. In addition, as part of NASDAQs application for exchange registration, we agreed that 20% of the directors of the Exchange will be elected by members of the Exchange rather than the equity holders of the Exchange. Any failure by the Exchange to diligently and fairly regulate its market or to otherwise fulfill its regulatory obligations could significantly harm our reputation, prompt SEC scrutiny and adversely affect our business and reputation.