Notice2022-04834
Joint Industry Plan; Notice of Filing of Amendment No. 4 to the National Market System Plan for the Selection and Reservation of Securities Symbols
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Published
March 8, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 45 (Tuesday, March 8, 2022)</title>
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[Federal Register Volume 87, Number 45 (Tuesday, March 8, 2022)]
[Notices]
[Pages 13027-13030]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-04834]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94351; File No. 4-533]
Joint Industry Plan; Notice of Filing of Amendment No. 4 to the
National Market System Plan for the Selection and Reservation of
Securities Symbols
March 2, 2022.
Pursuant to Section 11A of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that
on February 11, 2022, The Nasdaq Stock Market LLC (``Nasdaq''), on
behalf of participants to the National Market System Plan for the
Selection and Reservation of Securities Symbols (``Symbology Plan'' or
``Plan'') filed with the Securities and Exchange Commission
(``Commission'') a proposal to amend the Symbology Plan.\3\ The
proposal represents the fourth substantive amendment to the Plan
(``Amendment'') and reflects changes unanimously approved by the Plan
participants (``Participants'').\4\ The Amendment proposes to, among
other things, eliminate certain Plan processor costs, release perpetual
reservations, increase the number of limited-time symbol reservations,
modify the waitlist provisions, and clarify the portability of symbol
reservations.
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\1\ 15 U.S.C. 78k-1(a)(3).
\2\ 17 CFR 242.608.
\3\ The Plan was created to enhance the effectiveness and
efficiency of the national market system and to provide for fair
competition between the self-regulatory organizations that list
equity securities by establishing a uniform system for the selection
and reservation of securities symbols. The Plan, among other things,
sets forth the process for securing perpetual and limited-time
reservations, the use of a waiting list, the right to reuse a symbol
and the ability to request the release of a symbol.
\4\ The Plan Participants are BOX Exchange LLC, Cboe BYX
Exchange, Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc.,
Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Chicago Board
Options Exchange, Incorporated, Financial Industry Regulatory
Authority, Investors Exchange LLC, Long-Term Stock Exchange, Inc.,
MEMX LLC, Miami International Securities Exchange, LLC, MIAX Pearl,
LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq PHLX LLC, Nasdaq, New
York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc.
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The proposed Amendment has been filed by the Participants pursuant
to Rule 608(b)(2) under Regulation NMS.\5\ The Commission is publishing
this notice to solicit comments on the proposed Amendment from
interested persons. Sections I and II contain statements that were
prepared and submitted to the Commission by the Participants about the
purpose of the Amendment, along with information pursuant to Rule
608(a) under the Act.
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\5\ 17 CFR 242.608(b)(2).
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I. Rule 608(a)
A. Purpose of the Amendment
Since the Symbology Plan was originally approved,\6\ it has been
modified several times to add additional participants.\7\ The plan
participants now
[[Page 13028]]
seek to amend the Symbology Plan as set forth below, and attached [sic]
hereto as Exhibit A.
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\6\ On November 6, 2008, the Commission approved the Symbology
Plan that was originally proposed by the Chicago Stock Exchange,
Inc. (``CHX''), The Nasdaq Stock Market, Inc. (n/k/a The Nasdaq
Stock Market LLC) (``Nasdaq''), National Association of Securities
Dealers, Inc. (``NASD'') (n/k/a Financial Industry Regulatory
Authority, Inc. (``FINRA'')), National Stock Exchange, Inc.
(``NSX'') (n/k/a NYSE National, Inc. (``NYSE National'')), and
Philadelphia Stock Exchange, Inc. (n/k/a Nasdaq PHLX LLC
(``Phlx'')), subject to certain changes. See Securities Exchange Act
Release No. 58904, 73 FR 67218 (November 13, 2008) (File No. 4-533).
\7\ On November 18, 2008, ISE filed with the Commission an
amendment to the Plan to add ISE as a member to the Plan. See
Securities and Exchange Act Release No. 59024 (November 26, 2008),
73 FR 74538 (December 8, 2008) (File No. 4-533). On December 22,
2008, NYSE, NYSE Arca, and NYSE Alternext (n/k/a NYSE American)
(``NYSE Group Exchanges''), and Cboe filed with the Commission
amendments to the Plan to add the NYSE Group Exchanges and Cboe as
members to the Plan. See Securities Exchange Act Release No. 59162
(December 24, 2008), 74 FR 132 (January 2, 2009) (File No. 4-533).
On December 24, 2008, BSE (n/k/a BX) filed with the Commission an
amendment to the Plan to add BSE as a member to the Plan. See
Securities Exchange Act Release No. 59187 (December 30, 2008), 74 FR
729 (January 7, 2009) (File No. 4-533). On September 30, 2009, BATS
(n/k/a CboeBZX) filed with the Commission an amendment to the Plan
to add BATS as a member to the Plan. See Securities Exchange Act
Release No. 60856 (October 21, 2009), 74 FR 55276 (October 27, 2009)
(File No. 4-533). On July 7, 2010, EDGA (n/k/a CboeEDGA) and EDGX
(n/k/a CboeEDGX) filed with the Commission an amendment to the Plan
to add EDGA and EDGX, each as a party to the Symbology Plan. See
Securities Exchange Act Release No. 62573 (July 26, 2010), 75 FR
45682 (August 3, 2010) (File No. 4-533). On May 7, 2012, BOX filed
with the Commission an amendment to the Plan to add BOX as a member
to the Plan. See Securities and Exchange Act Release No. 66957 (May
10, 2012), 77 FR 28904 (May 16, 2012). On November 4, 2016, IEX
filed with the Commission an amendment to the Plan to add IEX as a
member to the Plan. See Securities Exchange Act Release No. 79422
(November 29, 2016), 81 FR 87645 (December 5, 2016). On February 26,
2018, MIAX filed with the Commission an amendment to the Plan to add
MIAX as a member to the Plan. See Securities Exchange Act Release
No. 82885 (March 15, 2018), 83 FR 12430 (March 21, 2018). On October
17, 2019, LTSE filed with the Commission an amendment to the Plan to
add LTSE as a member to the Plan. See Securities Exchange Act
Release No. 87597 (November 22, 2019), 84 FR 65448 (November 27,
2019). On July 6, 2020, MEMX filed with the Commission an amendment
to the Plan to add MEMX as a member to the Plan. See Securities
Exchange Act Release No. 89419 (July 29, 2020), 85 FR 46767 (August
3, 2020).
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Plan Processor Costs (Section I(c))
The participants seek to amend Section I(c) to require new parties
to provide a signed copy of the Symbology Plan to the Commission and
become a party to any contract required pursuant to Section III with
the Processor. These changes are intended to codify existing practices.
In addition, the participants seek to eliminate the costs of entry
for new participants. The Processor found that in recent years, the
calculated pro rata amounts were de minimus or zero, and the
participants are therefore proposing this change to help modernize the
process and remove burdensome administrative tasks.
Perpetual Reservations (Section IV(b)(1)(A) and (d))
The parties seek amend Section IV(b)(1)(A) to release their list of
perpetual reservations (``List A reservations''), effective 30 calendar
days following the date of the Commission's approval of the amendment
to the Symbology Plan, except for those symbols which are used only for
the purpose of system testing (``Test Symbols''). No new List A
reservations shall be made, and parties shall not maintain a List A
reservation, except for the purpose of reserving Test Symbols. This
change is intended to supplement the changes described below to require
all symbol reservations to be made at the request of an issuer in
connection with a potential listing. The parties also seek to amend
Sections IV(b)(1)(B), (b)(2)(F) and (d) to eliminate the references to
List A reservations.
List B Reservations (Section IV(b)(1)(B))
The plan participants seek to amend the Symbology Plan to increase
the number of limited-time symbol reservations (``List B
reservations'') that a party to the Symbology Plan can reserve from
1,500 to 2,500 for symbols using one, two or three characters, on the
one hand, and for symbols using four or five characters, on the other
hand, in Section IV(b)(1)(B).
The increase in the number of limited-time symbol reservations is
necessary given the substantial increase in the number of IPOs and
other new listings. For example, one data source indicates that the
number of IPOs was at a 20 year low in 2008 when the Symbology Plan was
adopted, with 62 IPOs that year. In contrast, in 2020 there were 480
IPOs, and in 2021 there were 1,058 IPOs, representing a 220% increase
year-over-year.\8\ Moreover, accompanying this increase in IPOs is a
significant increase in the number of applications for new company
listings and in prospects considering a public listing, each of which
may require a symbol reservation.
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\8\ See Stock Analysis, IPO Statistics, available at: <a href="https://stockanalysis.com/ipos/statistics/">https://stockanalysis.com/ipos/statistics/</a> (last accessed January 18, 2022).
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In addition, an increase in the popularity of SPACs has
necessitated the reservation of more symbols. Specifically, before a
SPAC is listed a symbol is reserved for the SPAC while, at the same
time, plan participants also reserve symbols for the operating
companies that may eventually become the target of a SPAC. In 2021,
there were 613 SPAC IPOs, compared to 248 SPAC IPOs in 2020,
representing a 247% increase.\9\
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\9\ See Nasdaq, A Record Pace for SPACs in 2021, available at:
<a href="https://www.nasdaq.com/articles/a-record-pace-for-spacs-in-2021">https://www.nasdaq.com/articles/a-record-pace-for-spacs-in-2021</a>.
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As such, while at the time of the Symbology Plan's adoption in 2008
it appeared sufficient to allow 1,500 one, two or three character
reservations, on the one hand, and 1,500 four or five character
reservations, on the other hand, those limits are no longer appropriate
given current activity.
The plan participants also seek to make certain other amendments to
Section IV(b)(1)(B) of the Symbology Plan in connection with a symbol
reservation. Specifically, the parties propose to:
1. Add a new subclause (i) specifying that no party shall make a
limited-time symbol reservation (``List B reservation'') request with
respect to a particular symbol unless said party has a reasonable basis
to believe it will utilize such symbol within the next 24 months.
2. Add a new subclause (ii) specifying that each List B request
made by a party for non-exchange traded products must be made in
connection with the potential listing of a security on such party at
the request of the issuer (or an agent of the issuer) of such security,
and the reserving party must confidentially indicate the potential
listing in the Symbol Reservation System and maintain documentation
demonstrating that it has a reasonable basis to believe it will utilize
such symbol for the listing of such security within the next 24 months.
3. Add a new subclause (iii) specifying that all List B reservation
requests made by a party for exchange traded products must be made at
the request of the issuer (or an agent of the issuer) of such security.
4. Add a new subclause (iv) specifying that the party shall release
the symbol if it no longer reasonably believes that the issuer will
list a security using the symbol.
5. Add a new subclause (v) specifying that a party shall not
reserve more than one symbol per potential security listing that is not
an exchange traded product. For the avoidance of doubt, if an issuer
has multiple potential securities (e.g., an issuer of exchange-traded
products or an operating company listing several classes of
securities), the party may reserve multiple symbols at the request of
the issuer so long as all other requirements set forth in Section
IV(b)(1)(B) are met.
A corresponding clarifying change is proposed to Section
IV(b)(3)(C) to clarify that List B reservation requests must be
submitted in accordance with subclauses (i) to (v) of Section
IV(b)(1)(B). The above changes are intended to ensure that each party
reserves a symbol in connection with a potential listing, and
confidentially indicates the company's name in the system. In the case
of exchange-traded products, subclauses (iii) and (v) will allow
exchanges to reserve multiple symbols at the request of an issuer
listing multiple potential securities. These issuers commonly issue
more than one product with different root symbols, unlike corporate
issuers who rely on the same root symbol even where they have multiple
classes.
Clarify Provisions That Only Applied to the Original Plan (Sections
IV(b)(1-3) and (c))
The participants seek to make certain clarifications in Sections
IV(b)(1-3) and (c)(1) of the Symbology Plan to update outdated language
regarding reservations prior to the original effective date of the
Symbology Plan (November 6, 2008). These changes are intended to
clarify that certain provisions only applied prior to
[[Page 13029]]
November 6, 2008, and are not applicable thereafter. However, the
parties would like to retain the outdated language in Section IV(b)(2)
of the Symbology Plan to provide transparency to any future new
participants.
Waitlist Provisions
The parties seek to amend the Symbology Plan to permit an exchange
to be on the waitlist for a symbol that it has reserved for another
company. This is intended to address scenarios in which an issuer
listing on an exchange requests a symbol that another issuer has
already reserved with the same exchange. For example, if two companies
request that NYSE reserve the ticker symbol ``ABC,'' NYSE could reserve
``ABC'' for Company 1 and place itself on the waitlist for ``ABC'' for
Company 2. If Company 1 no longer wants to use the symbol, NYSE can
release the symbol to Company 2. These changes are reflected in
Sections IV(c)(1) and IV(c)(3)).
Currently, the Symbol Reservation System does not allow an exchange
to go on the waitlist for a symbol it has already reserved. The
Processor informed the plan participants that it estimates it will not
able to begin work on the tech changes required to implement this
functionality until Q3 of 2022. In the meantime, the particpants [sic]
propose an interim solution to informally allow a party to go on the
waitlist with coordination from the other SROs:
1. NYSE reserves symbol ABC for Company 1.
2. A week later, NYSE receives a request to reserve symbol ABC for
Company 2. NYSE emails the plan participants to notify them that NYSE
has received another request for symbol ABC. The email would include
the time of the issuer's request, the time of the email, the exchange
requesting it, and any other information typically included in the
Symbol Reservation System. An email template is attached [sic] as
Exhibit B.
3. The email memorializes that Company 2 is now on the ``waitlist''
after Company 1 for symbol ABC. Each plan participant is responsible
for reading and cataloging this email for its own records.
4. A few weeks later, Nasdaq goes on the Symbol Reservation System
waitlist for symbol ABC for Company 3. Company 3 is now on the waitlist
behind Company 1 and Company 2, according to the email records.
However, in the Symbol Reservation System, Nasdaq would appear on the
waitlist (for Company 3) immediately after NYSE (for Company 1).
5. A month later, Company 1 chooses to release the symbol, and
Company 2 would like to reserve it. NYSE contacts Nasdaq and asks
Nasdaq to remove itself from the Symbol Reservation System waitlist for
Company 3, so that NYSE can go on the waitlist and re-reserve symbol
ABC for Company 2.
Portability of Symbols (Section IV(f))
The participants seek to make certain clarifying amendments to
Section IV(f) of the Symbology Plan to clarify that, as is generally
consistent with current practice in accordance with the Symbology Plan,
symbols are reserved for issuers in connection with a specific listing,
and that those issuers can use a symbol reserved for their listing on
any national securities exchange, including if an issuer wants to
transfer to another exchange prior to listing.
Under the proposed amendment to subsection (1), if an SRO (a ``New
SRO'') lists a security or product that previously was listed on
another SRO (a ``Former SRO''), immediately prior to listing on the New
SRO, the New SRO shall have the rights to that symbol unless, in the
New SRO's sole discretion, it consents to the symbol being retained by
the Former SRO, provided however, that such Former SRO shall not reuse
that symbol to identify a new security or product unless the Former
SRO, in its sole discretion, reasonably determines that such use would
not cause investor confusion.
Under the proposed amendment to subsection (2), if an SRO reserves
a symbol pursuant to subsection (b)(1)(B) for a specific security or
product of an issuer, and the issuer of the security or product decides
to list on a different SRO (the ``Listing SRO'') during the period that
the reservation is in effect, the Listing SRO shall have the rights to
that symbol unless, in the Listing SRO's sole discretion, it consents
to the reserving SRO retaining the symbol on its reservation List B.
Other Amendments
The participants also seek to make certain clarifying amendments to
the Symbology Plan to update the names of plan participants in Section
I(a), update section references in Section IV(d), and correct minor
typographical errors in Section III and IV(a).
B. Governing or Constituent Documents
Not applicable.
C. Implementation of Amendment
The proposed amendment will be implemented upon approval of the
Commission.
D. Development and Implementation Phases
Not applicable.
E. Analysis of Impact on Competition
The amendment does not impose any burden on competition because it
affects each member of the Symbology Plan in the same way.
F. Written Understanding or Agreements Relating to Interpretation of,
or Participation in, Plan
Not applicable.
G. Approval by Sponsors in Accordance With Plan
Pursuant to Section VIII of the Symbology Plan, each of the
participants to the Symbology Plan has authorized this amendment.
H. Description of Operation of Facility Contemplated by the Proposed
Amendment
Not applicable.
I. Terms and Conditions of Access
Not applicable.
J. Method of Determination and Imposition, and Amount of, Fees and
Charges
Not applicable.
K. Method and Frequency of Processor Evaluation
Not applicable.
L. Dispute Resolution
Not applicable.
II. Regulation NMS Rule 601(a)
A. Equity Securities for Which Transaction Reports Shall Be Required by
the Plan
Not applicable.
B. Reporting Requirements
Not applicable.
C. Manner of Collecting, Processing, Sequencing, Making Available and
Disseminating Last Sale Information
Not applicable.
D. Manner of Consolidation
Not applicable.
E. Standards and Methods Ensuring Promptness, Accuracy and Completeness
of Transaction Reports
Not applicable.
F. Rules and Procedures Addressed to Fraudulent or Manipulative
Dissemination
Not applicable.
[[Page 13030]]
G. Terms of Access to Transaction Reports
Not applicable.
H. Identification of Marketplace of Execution
Not applicable.
III. Solicitation of Comments
The Commission seeks comment on the Amendment. Interested persons
are invited to submit written data, views, and arguments concerning the
foregoing, including whether the proposed Amendment is consistent with
the Act and the rules and regulations thereunder applicable to national
market system plans. Comments may be submitted by any of the following
methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#e290978e87cf818d8f8f878c9691a2918781cc858d94"><span class="__cf_email__" data-cfemail="becccbd2db93ddd1d3d3dbd0cacdfecddbdd90d9d1c8">[email protected]</span></a>. Please include
File Number 4-533 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number 4-533. This file number
should be included on the subject line if email 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 website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the Plan that are filed with the Commission,
and all written communications relating to the Plan 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 website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549 on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
such filing also will be available for inspection and copying at the
Parties' principal offices. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number 4-533,
and should be submitted on or March 29, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(85).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-04834 Filed 3-7-22; 8:45 am]
BILLING CODE 8011-01-P
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