Nasdaq Gets Approval for Three-Letter Stock Symbols
By Edgar Ortega
July 10 (Bloomberg) -- Nasdaq Stock Market Inc., the second- biggest U.S. equity market, gained approval for a new rule that will allow companies that it lures from rival exchanges to keep their three-letter trading symbols.
Since its founding in 1971, Nasdaq has only listed companies using symbols with four letters or more. The new rule will help companies reduce investor confusion and foster competition among exchanges, the U.S. Securities and Exchange Commission said.
``Currently, an issuer deciding whether to transfer its listings to Nasdaq must consider, among other factors, the fact that it would need to change its ticker,'' the SEC said in the approval notice dated July 9. The change will ``enhance competition between Nasdaq and the other exchanges in the business of providing a listing venue.''
Nasdaq won the rule change as exchanges seek new listings to capitalize on record initial public offerings around the world. Nasdaq and its larger rival NYSE Euronext also have added new services for the almost 6,000 publicly traded companies. Listing fees account for 10 percent of revenue at Nasdaq and 13 percent at NYSE Euronext.
Under the new rules, companies will be allowed to retain their three-letter stock symbols if they transfer to Nasdaq from the NYSE or American Stock Exchange. The regulators are also considering a broader plan that would let Nasdaq use tickers of any length for both new listings and transfers.
Adding a W
The SEC's decision today extends a one-time exemption granted in March when the agency allowed Delta Financial Corp. to retain its ``DFC'' ticker when it switched from the Amex to Nasdaq.
Last year, the online brokerage Charles Schwab Corp. had to add a ``W'' to the end of its ticker when it transferred to Nasdaq from the NYSE, where it traded under the symbol ``SCH.'' E*Trade Financial Corp. changed its ticker to ``ETFC'' from ``ET'' when it left the NYSE for Nasdaq last year.
NYSE Euronext had asked the SEC to reject Nasdaq's proposal, claiming it will confuse investors accustomed to seeing three- letter symbols listed only at the Big Board and Amex. The NYSE filed a competing proposal that would limit the use of all symbols shorter than four-letters to the Big Board and the Amex.
``Ticker symbols are an important distinguishing characteristic for issuers and exchanges,'' NYSE spokesman Richard Adamonis said in an e-mailed statement today. ``Clearly defined symbol methodology eliminates possible confusion among investors and, in the case of the NYSE, underscores the rigorous financial and compliance standards applied to our listed companies.''
To contact the reporters on this story: Edgar Ortega in New York at ebarrales@bloomberg.net .
Last Updated: July 10, 2007 17:21 EDT |
