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The Securities and Exchange Commission has received two proposed national market system plans from separate groups of stock exchanges relating generally to securities symbols. In addition, Nasdaq has filed with the Commission a separate proposal to permit a company in certain circumstances to retain its symbol when transferring its listing to Nasdaq from another stock exchange. After publishing these plans and proposal for comment the Commission will resolve the conflicts over the allocation of stock symbols as fairly and expeditiously as possible.
Erik Sirri, Director of the SEC Division of Market Regulation, said, "Securities symbols are an important part of a listed company's identity and developing a formal process to reserve, select and allocate symbols among listing markets and their companies will help promote a fair and orderly national market system and prevent investor confusion."
Background
Securities symbols are a key element in the operation of a national market system, and essential to the dissemination of trade information in a common format. Historically, security symbols have been assigned under an informal understanding among the listing markets. It has been the practice of the New York Stock Exchange to list companies using 1-, 2- and 3-character symbols. Other exchanges, including the American Stock Exchange and regional exchanges, have also listed companies using 3-character symbols. Nasdaq has always listed companies using 4- and 5-character symbols.
The Nasdaq "Portability" Proposals
Nasdaq first announced in November 2005 its intention to begin listing companies with 1-, 2- and 3-character symbols. Since that time, Nasdaq has made a series of announcements detailing its plans, and has worked with the industry to test trading systems to ensure proper functionality for such symbols, including a proposal to allow one company, Delta Financial Corporation, to transfer its listing from Amex to Nasdaq while keeping its 3-character symbol. The relevant release for this company specific proposal can be found on the SEC Web site at http://www.sec.gov/rules/sro/nasdaq/2007/34-55519.pdf.
On March 29, 2007, Nasdaq filed a proposal that would permit the display of 3-character symbols on Nasdaq. This proposal, SR-Nasdaq-2007-031, can be found on the SEC Web site at http://www.sec.gov/rules/sro/nasdaq/2007/34-55563.pdf and will be considered by the Commission after the required public comment period, which will close on April 25, 2007.
The General Proposals
In response to dissatisfaction expressed by several markets regarding the informal allocation system, Commission staff asked in February 2005 that the exchanges work together to develop a national market system plan for the process of reserving, selecting, and allocating securities symbols. Following discussions among the exchanges over the past two years, the exchanges recently submitted two competing proposals relating generally to symbols.
- One proposed plan is supported by Amex, NYSE and NYSE Arca and limits the use of
1-, 2- and 3-character symbols to those listing markets that traditionally used those symbols. It does not address the use of 4- and 5-character symbols.
- The second proposed plan is supported by Nasdaq, NASD, the National Stock Exchange and the Philadelphia Stock Exchange. This plan would permit any listing market to use 1-, 2-, 3-, 4- or 5-character symbols.
These two proposed national market system plans are currently available on the Commission's Web site at www.sec.gov/rules/sro/4-533.pdf and www.sec.gov/rules/sro/4-534.pdf. Pursuant to the process laid out in Rule 608 under the Securities Exchange Act of 1934, the Commission plans to publish these two proposed plans for public comment.
Additional materials: Joint Proposed Rule; Release No. 34-53560
