The National Association of Securities Dealers' board unanimously approved a $1 billion plan to change the Nasdaq Stock Market into a private, for-profit company that will sell stock in itself to raise money.

"This gives Nasdaq more flexibility in a highly competitive and fast-moving environment," NASD Chairman Frank Zarb said at a news conference. "It gives Nasdaq the ability to assemble the capital and resources necessary to take on the next generation of global transactions."

The plan, which Zarb has said he wants to put into effect by July, will make Nasdaq the first securities market in the United States to be owned by shareholders rather than by member brokerages. Several other U.S. exchanges, including the largest, the New York Stock Exchange, also are becoming corporations to try to meet growing competition from low-cost electronic trading networks.

Today's NASD vote capped a 15-month internal review that saw the leadership's original plan yanked by Zarb last month in the face of opposition from small member firms. The final plan, which contains concessions to those brokerages, reflects the board's desire to get ready access to funding for the market's expanding technology needs.

The vote came as the Nasdaq composite index tumbled 229.46 points, its biggest point drop ever. Last year the Nasdaq soared 86 percent, the biggest gain ever recorded by a major market index.

The NASD, an industry group that owns Nasdaq, the second-largest U.S. stock market, will submit the plan to a vote by its 5,500 member firms, probably by March, Zarb said. NASD board member Alan Davidson, who led a fight by small member firms against the original NASD plan, said he expects the members to approve the final proposal.

The industry group plans to sell its control of the market through two private placements of as much as 79 percent of the new company's stock, Zarb said.

Those stock sales will be made to member brokerages, institutional investors and 130 large listed companies such as Microsoft Corp. and Intel Corp.

The first placement will leave as much as 49 percent of the company in the new shareholders' hands, and the second will sell another 30 percent of Nasdaq, Zarb said. The NASD will keep a minority stake in Nasdaq, which will be separated from the industry group.

Nasdaq now derives its revenue from membership, trading and listing fees, and from sale of stock data to vendors and brokerages. It often has run into resistance when it attempted to increase its revenue from any of those sources.