[Federal Register: April 4, 2007 (Volume 72, Number 64)]
[Notices]
[Page 16391-16392]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ap07-96]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55563; File No. SR-NASDAQ-2007-031]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change Relating to Trading Three-
Character Symbols
March 30, 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 29, 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. 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.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes to allow any company with a three-character symbol
that transfers its securities to Nasdaq from another domestic market to
continue using the existing three-character symbol that identifies the
company's securities.
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.\3\ In 2005, however, Nasdaq announced its
intent to allow companies listed on Nasdaq to also use one-, two-, or
three-character symbols beginning on January 31, 2007.\4\ This
announcement was designed to provide market participants and vendors
the time needed to make required changes to their own systems that may
be affected by the change. 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.\5\ 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.'' \6\ On March 22, 2007, Delta Financial Corporation
transferred the listing of its common stock to Nasdaq from the American
Stock Exchange (``Amex'') and maintained its three-character symbol,
DFC.\7\ Nasdaq represents that there have been no trading problems
reported to Nasdaq as a result of trading that security on Nasdaq with
a three-character symbol.
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\3\ This includes securities listed on Nasdaq's predecessor
market, operated as a facility of the NASD.
\4\ 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
.
\5\ 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
.
\6\ Head Trader Alert 2007-050 (March 1, 2007), available at:
http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-050.stm
.
\7\ See Securities Exchange Act Release No. 55519 (March 26,
2007) (SR-NASDAQ-2007-025).
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Nasdaq now proposes to allow any company with a three-character
symbol that transfers its securities to Nasdaq from another domestic
market to continue using the existing three-character symbol that
identifies the company's securities.\8\ Nasdaq believes that this will
promote competition among exchanges and reduce investor confusion.
Specifically, Nasdaq believes that issuers should have the freedom of
choice and competition. Nasdaq believes that 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, Nasdaq believes that 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. Nasdaq believes that, as such,
permitting the portability of these symbols will enhance competition
among exchanges and encourage issuers to evaluate exchanges on the
basis of objective criteria, including the most efficient trading
platform for investors and the lowest costs for shareholders.
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\8\ Nasdaq states that it remains committed to working with the
Commission and other markets to establish an equitable and
transparent symbol assignment plan.
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Nasdaq believes that permitting companies to continue to use their
historical symbol will also reduce investor confusion associated with
any such transfer because investors will continue to be able to obtain
quotations and execute trades using the same familiar symbol and will
allow the issuer to maintain a symbol that has
[[Page 16392]]
become a part of its identity to investors.\9\
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\9\ Nasdaq states that a market transfer will be transparent to
investors because, under the Commission's rules, a company must
announce the transfer of its listing on a Form 8-K. See Form 8-K,
item 3.01(d). In addition, the issuer must publish notice of its
intent to delist its securities from the current market, in a press
release and on its Web site. See 17 CFR 240.12d2-2(c)(2)(iii).
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Nasdaq believes that this proposal is also consistent with the
historical practice of companies that have switched among national
securities exchanges. Since August 2001, approximately 200 issues have
transferred their listing between the Amex, the New York Stock Exchange
(``NYSE''), and NYSE Arca, while maintaining their original ticker
symbol upon transfer.\10\ Now that Nasdaq is also a national securities
exchange,\11\ allowing companies to maintain their symbol when
transferring to Nasdaq would be consistent with the current practices
of other exchanges.
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\10\ See, e.g., Allis-Chambers Energy (announced on March 7,
2007 its intent to switch from Amex to NYSE keeping the symbol ALY),
Yamana Gold Inc. (announced on December 21, 2006 its intent to
switch from Amex to NYSE keeping the symbol AUY), VAALCO Energy
(announced on October 2, 2006 its intent to switch from Amex to NYSE
keeping the symbol EGY), the transfer of 15 iShares ETFs from the
Amex to NYSE Arca keeping their symbols announced on September 27,
2006, and the transfer of The Latin America Equity Fund, Inc.,
Credit Suisse Asset Management Income Fund, Inc., The Chile Fund,
among others, from NYSE to AMEX on May 11, 2006 keeping their
respective symbols CIK, LAQ and CH. A complete list of these
transfers is available from Nasdaq upon request.
\11\ Nasdaq became operational as an exchange for Nasdaq-listed
securities on August 1, 2006. See Nasdaq Issuer Alert 2006-001,
available at: http://www.complinet.com/file_store/pdf/rulebooks/nasdaq_ia2006-001.pdf.
See also Securities Exchange Act Release No.
53128 (January 13, 2006), 71 FR 3550 (January 23, 2006).
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Finally, Nasdaq believes that the changes to its systems to
accommodate one-, two-, and three-character symbols will enhance the
strength of the U.S. capital markets. As a result of these
technological changes, 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 notes that this provides an
added level of redundancy and resiliency for the U.S. capital markets,
and is key to Nasdaq's ability to provide a 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.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\12\ in general and with Section
6(b)(5) of the Act,\13\ 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. Nasdaq believes that the proposal
will reduce investor confusion and encourage competition among
exchanges.
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\12\ 15 U.S.C. 78f.
\13\ 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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-2007-031 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-2007-031. 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-2007-031 and should be submitted on or before
April 25, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-6335 Filed 4-3-07; 8:45 am]
BILLING CODE 8010-01-P