[Federal Register: April 2, 2007 (Volume 72, Number 62)]
[Notices]
[Page 15737-15739]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ap07-120]
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SECURITIES AND EXCHANGE COMMISSION
Release No. 34-55519; File No. SR-NASDAQ-2007-025)
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Trading One-, Two-, and Three-Character Symbols
March 26, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 21, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II and III below, which Items have
been substantially prepared by Nasdaq. Nasdaq has filed this proposal
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(5)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(5).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes to trade the securities of Delta Financial
Corporation using the three-character symbol ``DFC.''
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Historically, securities listed on Nasdaq have traded using four or
five character symbols.\5\ In 2005, however, Nasdaq announced its
intent to allow companies listed on Nasdaq to also use one-, two-, or
three-character symbols.\6\ Nasdaq announced a series of dates
throughout December 2006 and January and February 2007 where market
participants could test trading Nasdaq stocks using one-, two-, or
three-character symbols on weekends, in after hour sessions, and during
full day sessions.\7\ Beginning February 20, 2007, Nasdaq had the
ability to accept and distribute Nasdaq-listed securities with one-,
two-, or three-character symbols. Nasdaq reminded market participants
about this change again on March 1, 2007, stressing that ``[a]ll
customers should have completed their coding and testing efforts to
ensure their readiness to support 1-, 2- and 3-character NASDAQ-listed
issues.'' \8\
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\5\ This includes securities listed on Nasdaq's predecessor
market, operated as a facility of the NASD.
\6\ See Head Trader Alert 2005-133 (November 14, 2005),
available at: http://www.nasdaqtrader.com/Trader/News/2005/headtraderalerts/hta2005-133.stm
and Vendor Alert 2005-070 (November
14, 2005), available at: http://www.nasdaqtrader.com/Trader/News/2005/vendoralerts/nva2005-070.stm.
See also Head Trader Alert 2006-
144 (September 29, 2006), available at: http://www.nasdaqtrader.com/Trader/News/2006/headtraderalerts/hta2006-144.stm
, Head Trader Alert
2006-193 (November 16, 2006), available at: http://www.nasdaqtrader.com/Trader/News/2006/headtraderalerts/hta2006-193.stm
and Vendor Alert 2006-065 (October 4, 2006), available at:
http://www.nasdaqtrader.com/Trader/News/2006/vendoralerts/nva2006-065.stm
.
\7\ See Head Trader Alert 2006-201 (December 6, 2006), available
at: http://www.nasdaqtrader.com/Trader/News/2006/headtraderalerts/hta2006-201.stm
, Head Trader Alert 2007-008 (January 25, 2007),
available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-008.stm
, Head Trader Alert 2007-011
(January 30, 2007), available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-011.stm
, Head Trader Alert
2007-020 (February 7, 2007), available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-020.stm
, and Head Trader Alert 2007-034 (February 16, 2007),
available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-034.stm
.
\8\ Head Trader Alert 2007-050 (March 1, 2007), available at:
http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-050.stm
.
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Nasdaq believes that the changes to its systems to accommodate one-
, two-, and three-character symbols will promote competition among
exchanges and enhance the strength of the U.S. capital
[[Page 15738]]
markets. Specifically, Nasdaq believes that issuers should have the
freedom of choice and competition. As issuers face the important choice
of where to list their equities, the symbol an issuer currently uses
should not factor prominently in the listing decision process.
Similarly, the symbol that a market assigns to an issuer should not
serve as an anchor if the issuer wishes to transfer to a competing
market.\9\ As such, permitting the portability of this symbol will
enhance competition among exchanges. Furthermore, as a result of the
technological changes noted above, all Nasdaq systems, including the
Securities Information Processor (SIP), are able to support all NYSE-
and Amex-listed securities using their original symbols over its core
transaction and data platforms. Nasdaq states that this provides an
added level of redundancy and resiliency for the U.S. capital markets,
and is key to its ability to provide full back-up for other equity
markets in the event of a national or local emergency thereby enhancing
the strength of the U.S. capital markets.
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\9\ In that regard, Nasdaq notes that symbols are freely
transferred when securities switch between the American Stock
Exchange (``Amex''), the New York Stock Exchange (``NYSE''), and
NYSE Arca. See, e.g., Yamana Gold Inc. (on January 12, 2007 switched
from Amex to NYSE keeping the symbol AUY), VAALCO Energy (on October
12, 2006 switched from Amex to NYSE keeping the symbol EGY), and the
transfer of 15 iShares ETFs from Amex to NYSE Arca announced on
September 27, 2006. Now that Nasdaq is also a national securities
exchange, allowing companies to maintain their symbol when
transferring to Nasdaq would be consistent with the practice of
other exchanges.
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Nasdaq now proposes to allow one company, Delta Financial
Corporation, to keep its current symbol, DFC, when it transfers from
Amex to Nasdaq on March 22, 2007.\10\ Investors were notified of this
change on March 12, 2007 when the company announced its transfer and
continued use of the symbol ``DFC'' \11\ and Nasdaq notified market
participants on the same day.\12\ Moreover, Nasdaq believes that
forcing the company to change its trading symbol will cause confusion
among its investors.
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\10\ Nasdaq notes that Amex has raised no objections to Delta
Financial's continued use of the symbol DFC.
\11\ See company press release ``Delta Financial to Keep Its
`DFC' Ticker on NASDAQ'' dated March 12, 2007, available at: http://www.snl.com/irweblinkx/file.aspx?IID=107286&FID=3528005
.
\12\ See Head Trader Alert 2007-057 (March 12, 2007), available
at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-057.stm.
See also Vendor Alert 2007-020 (March 12, 2007),
available at: http://www.nasdaqtrader.com/Trader/News/2007/vendoralerts/nva2007-020.stm
.
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Given the foregoing, Nasdaq believes that market participants were
provided adequate notice of this change and are prepared to accommodate
the trading of this company using the symbol DFC. Further, Nasdaq
believes that any change to the symbol will cause confusion among
investors and market participants. As such, Nasdaq proposes to begin
trading the common stock of Delta Financial Corporation on Nasdaq using
the symbol DFC on March 22, 2007. While this filing relates to the
transfer of this issuer, Nasdaq states that it remains committed to
working with the Commission and other markets to establish an equitable
and transparent symbol assignment plan.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\13\ in general and with Section
6(b)(5) of the Act,\14\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to remove impediments to a free and
open market and a national market system, and, in general, to protect
investors and the public interest.
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\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(5) thereunder \16\ in
that it effects a change to an order-entry or trading system that: (i)
Does not significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) does not have the effect of limiting the access to or
availability of the system. As such, this proposed rule change is
effective upon filing with the Commission.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(5).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2007-025 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2007-025.
This file number should be included on the subject line if e-mail is
used. To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASDAQ-2007-025 and should be submitted on or before
April 23, 2007.
[[Page 15739]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-5966 Filed 3-30-07; 8:45 am]
BILLING CODE 8010-01-P