WASHINGTON (AP) _ The National Association of Securities Dealers will examine complaints raised by smaller brokerages about regulatory abuses following the NASD board's first contested election in history, chairman Frank Zarb said.

In previous board elections, candidates chosen by the NASD's nominating committee have run unopposed. But this year, the faction representing smaller brokerages ran to bring attention to their complaints and won two seats.

The group has been challenging what it sees as the unfair dominance in the NASD, parent of the Nasdaq Stock Market, by major Wall Street houses like Merrill Lynch & Co. and Salomon Smith Barney.

The dissident faction has charged that the self-policing brokers' organization, which has some 5,500 member firms, treats smaller firms more harshly when punishing abusive market practices and fraud.

``Everything's on the table,'' Zarb told Alan Davidson, leader of the dissident faction, Monday before they entered the NASD's annual meeting at a downtown hotel. He called some of Davidson's complaints ``fair and rational'' and said they ``should be considered by the board.''

The conciliatory mood was in sharp contrast to accusations leveled last week by Davidson, one of the two dissenters elected to the powerful board of governors. He is president of Zeus Securities Inc. in Jericho, N.Y., and of the Independent Broker-Dealer Association.

``We have these record investigations taking place from the NASD,'' Davidson said Friday in a telephone interview.

He maintained that Zarb, who also heads the newly merged Nasdaq-Amex market, ``has been very successful in running around the world buying up obsolete stock markets ... but has done virtually nothing to correct these regulatory abuses.''

Going head-to-head with the New York Stock Exchange, the nation's oldest and biggest stock market, by taking over the American Stock Exchange, Zarb and his team also have recently acquired the Philadelphia Stock Exchange. Last Thursday, they announced a venture with the Hong Kong Stock Exchange to provide a joint Internet Web site with information for investors.

``The welfare of the investor is really critical. ... Working families have a lot of their wealth now in the securities market,'' Zarb told the group as last-minute ballots sent by fax were being counted at Monday's meeting.

After the election results were announced, Davidson said, ``I intend to work with Frank Zarb for the interests of the membership to create a more level playing field.''

Davidson said there had been a flood of e-mail messages, faxes and phone calls in support of the dissenters' ``grass-roots campaign ... to oppose the handpicked'' nominees for the board of governors, who were selected by the NASD's nominating committee.

This year, 12 of the 35 board members are leaving.

The dissidents put forward their own slate of four candidates in the annual election to replace retiring members of the board. Elected with Davidson was M. Larae Bakerink, compliance director of SK International Securities Corp. The two other dissident candidates _ Bill Singer, a regulatory attorney in New York, and Dan Jamieson, editor-in-chief of Registered Representative magazine, didn't get enough votes.

The third newly elected member representing the securities industry is Richard Romano, president of brokerage Romano Brothers & Co., who has been openly critical of the dissidents.

Jamie Dimon, the former chairman and co-chief executive of Citigroup Inc.'s Salomon Smith Barney brokerage operation, lost his election bid.

Former President Gerald Ford was elected to a one-year term as a public member.

Elected to three-year terms as public members were Elaine Chao, distinguished fellow at the Heritage Foundation; Kenneth Duberstein, a former presidential adviser who runs a consulting firm; Donald J. Kirk, executive-in-residence at Columbia University; and John D. Markese, president of the American Association of Individual Investors.