LEADERS

ONLINE

Women Leaders

311 mcgrath.tif

Claire P. McGrath

The Role of
In-House Counsel

Editors’ Note

Claire McGrath joined the American Stock Exchange in 1987 as a Staff Attorney in the options division. From 1993 to 2001, she was Vice President and Derivatives Legal Counsel, and from June 2001 through July 2005, she served as Deputy General Counsel, before assuming her current post. McGrath holds a bachelor’s degree from Stony Brook University and a JD from Brooklyn Law School.

Company Brief

Based in New York, the American Stock Exchange, LLC (Amex®), offers trading across a full range of equities, options, and exchange-traded funds (ETFs), including structured products and HOLDRSSM. In addition to its role as a national equities market, the Amex (www.amex.com) is the pioneer of the ETF, responsible for bringing the first domestic product to market in 1993. Leading the industry in ETF listings, the Amex currently lists over 350 ETFs. The Amex is also one of the largest options exchanges in the United States, trading options on broad-based and sector indexes as well as domestic and foreign stocks.

How do you define your role as General Counsel of the American Stock Exchange?

In-house counsel has a number of roles, but primarily I serve as a legal adviser to the board, senior management, and the Exchange’s businesses. Working closely with the businesspeople, we’re able to give legal advice that is based on a firsthand understanding of the organization. That’s an extremely important role. We are also involved in decisions as they are being made. Often, businesspeople want to do something that may not meet legal or regulatory tests, but because we understand their goals and have been involved as they develop their ideas, we are able to counsel them and give them alternative ways to meet their objectives.

Exchanges are heavily regulated entities, and they have dual functions. We provide a market for investors and industry people to trade shares of our listed companies and trade options and ETFs. But at the same time, we’re regulating all of those industry participants as orders get executed in this market. So we are both the provider and the regulator of this marketplace. As in-house counsel, we need to make sure that regulatory concept permeates all of our business functions and that our businesspeople understand those regulatory issues. In addition, the Exchange has announced that it’s changing its corporate structure, which is often referred to as a demutualization. Essentially, we are becoming a for-profit corporation, and that is good for many reasons, but there are a lot of legal issues that require my attention.

Have regulatory authorities invited leaders of the exchanges into the discussions surrounding the regulations that govern your business?

Yes. Our prime regulator, the Securities and Exchange Commission [SEC], takes some positions on issues that we might not agree with, but we have a process for making our concerns known. We often write comment letters and advocate our positions with the staff, so there is definitely a place for open dialogue. We interface with the SEC on small and big matters, and we’re used to offering our views on issues. Industry leaders often look to exchanges for that kind of leadership. We don’t always get what we want, but we feel it’s important to have our voices heard.

In recent years, the American Stock Exchange has gone through somewhat of a transformation. Have you been pleased with the Exchange’s progress?

Yes, it has been exciting. Neal Wolkoff, our Chairman and CEO, is a dynamic leader, and he has been able to bring people together to make changes. He gets the details of the business, and he helps people come up with ways to meet their challenges. One of the exciting things about working for the Amex is that we are continually faced with new challenges. Challenges are, for the most part, good; they keep people on their toes. We’re recognized as an innovative organization, and Neal has brought that out in people.

Is there a commitment to diversifying the workforce and creating good opportunities for women at the Amex?

The Exchange is one of the most diverse organizations in the industry. We have women in a number of senior roles, so there is opportunity. To get ahead, you have to be challenged and understand exactly what your client needs. I think it’s a good thing if someone has high expectations of me, whether it’s because I’m a woman or not, since I try to live up to those expectations. If you are good at your game, then you will get ahead at the Exchange whether you are a man or a woman.

Has technology affected the way you operate, and is technology at all impacting the role of General Counsel?

Yes, definitely. The Exchange is a very advanced technological organization, and what we need are people who understand and are comfortable with technology. Our role, especially when we have new technology platforms being put in place, is to translate the activity on the trading floor into rules, and translate that into something the SEC can understand and comfortably approve. So technology is a major part of the work that the staff does here. It’s not only understanding the regulation but understanding how it interfaces with the technological platform.

Twenty years ago, did you imagine you would be in a senior role yourself?

I am amazed; 20 years have gone by quickly. I don’t think I expected any of this 20 years ago, but I have been able to hold a number of different positions with the Exchange and no outside opportunity has looked as interesting or as exciting as what I do for this organization. I have made wonderful friendships with my associates over the years. It has been fun.

At the end of the work day, are you able to turn off the business and truly relax?

I try, but it’s challenging. I once took a vacation to Tobago, and was cruising around the island in a small boat. I didn’t have a cell phone with me, but the operator of the boat did. It rang, and it was for me – my paralegal was calling with a question on behalf of Neal. That said, Neal is very respectful of our need to recharge our batteries, and I respect my staff’s needs as well.