Notice2022-12396
Joint Industry Plan; Order Approving Amendment No. 4 to the National Market System Plan for the Selection and Reservation of Securities Symbols Submitted by The Nasdaq Stock Market LLC, BOX Exchange LLC, Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., CBOE EDGX Exchange, Inc., Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc., 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, New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc.
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 9, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 111 (Thursday, June 9, 2022)</title>
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[Federal Register Volume 87, Number 111 (Thursday, June 9, 2022)]
[Notices]
[Pages 35270-35272]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-12396]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95040; File No. 4-533]
Joint Industry Plan; Order Approving Amendment No. 4 to the
National Market System Plan for the Selection and Reservation of
Securities Symbols Submitted by The Nasdaq Stock Market LLC, BOX
Exchange LLC, Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., CBOE
EDGX Exchange, Inc., Cboe Exchange, Inc., Financial Industry Regulatory
Authority, Inc., 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, New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago,
Inc., and NYSE National, Inc.
June 3, 2022.
I. Introduction
On February 11, 2021,\1\ The Nasdaq Stock Market LLC (``Nasdaq''),
on behalf of itself and the 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''), pursuant to Section 11A of the
Securities Exchange Act of 1934 (``Act'') \2\ and Rule 608 of
Regulation National Market System (``NMS'') thereunder,\3\ a proposal
to amend the Symbology Plan.\4\ The proposal represents the fourth
substantive amendment to the Plan (``Amendment'') and reflects changes
unanimously approved by the Plan participants (``Participants'').\5\
Amendment No. 4 was published for comment in the Federal Register on
March 8, 2022.\6\ On April 13, 2022, Nasdaq submitted a letter to the
Commission related to Amendment No. 4, which corrected an error in the
Plan document included in the original filing.\7\ This Order approves
Amendment No. 4 to the Plan as reflected in the Modification Letter.
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\1\ See Letter from Jeffrey S. Davis, Senior Vice President and
Senior Deputy General Counsel, Nasdaq, to Vanessa Countryman,
Secretary, Commission (Feb. 11, 2022).
\2\ 15 U.S.C 78k-1(a)(3).
\3\ 17 CFR 242.608.
\4\ 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.
\5\ The Plan Participants are BOX Exchange LLC, Cboe BZX
Exchange, Inc., Cboe EDGA Exchange, Inc., CBOE EDGX Exchange, Inc.,
Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc.,
Investors Exchange LLC, Long-Term Stock Exchange, Inc., MEMX LLC,
Miami International Securities Exchange, LLC, MIAX PEARL, LLC,
Nasdaq, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq PHLX LLC, New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc.
\6\ See Securities Exchange Act Release No. 94351 (March 2,
2022), 87 FR 13027 (March 8, 2022) (``Amendment No. 4 Notice''). The
Commission received comment letters that are not germane to the
Amendment and are available on the Commission's website at: <a href="https://www.sec.gov/comments/4-533/4-533.htm">https://www.sec.gov/comments/4-533/4-533.htm</a>.
\7\ See Letter from Jeffrey S. Davis, Senior Vice President and
Senior Deputy General Counsel, Nasdaq, to Vanessa Countryman,
Secretary, Commission, dated April 13, 2022 (``Modification
Letter''). In the Modification Letter, the Participants corrected
the list of Participants that was submitted with the Amendment. The
Plan submitted with the Amendment included two exchanges that are
not currently Participants in the Plan. The Plan submitted with the
Modification Letter reflects the current Participants in the Plan
and made no other changes to the Amendment.
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II. Background and Description of the Proposal
A. Background
The Plan was created to establish a uniform system for the
selection and reservation of securities symbols and sets forth, among
other things, the process for securing symbol reservations, the use of
a waiting list, the ability to request the release of a symbol, and the
ability to reuse a symbol, provided that it does not create investor
confusion. Currently, Section IV of the Plan outlines the procedures
for the symbol reservation system, and provides Participants the
ability to reserve 20 perpetual (``List A'') and 1,500 limited-time
(``List B'') reservations, for 1-, 2-, and 3-character symbols, on the
one hand, and also for 4- and 5-character symbols, on the other. For
List B reservations, the Plan requires Plan Participants to have a
reasonable basis to believe that it will use the symbol within 24
months in order to reserve a symbol, but does not include a requirement
that such basis be furnished or that a symbol be reserved for a
specific issuer. There is also a process for reserving symbols under
the Plan, which provides for the use of a third-party processor and a
symbol reservation database. The Plan also includes, among other
things, provisions for the use of a waiting list, the right to reuse a
symbol, the ability to request the release of a symbol, the terms of
confidentiality, and the process for becoming a new Plan
participant.\8\
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\8\ See Securities Exchange Act Release No. 58904, 73 FR 67218
at 67222-23 (November 13, 2008) (File No. 4-533) (``Symbology Plan
Approval Order'').
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B. Description of Proposal
In Amendment No. 4, the Participants propose to modify the Plan in
several aspects: (1) to require the release of all perpetual (List A)
reservations, except for those used for test symbols; (2) to increase
the number of List B symbols that can be reserved for 1-, 2-, and 3-
character symbols and for 4- and 5-character symbols, respectively,
from 1,500 to 2,500 symbols; (3) to require a party making a List B
reservation to specify confidentially an issuer associated with that
reservation and to maintain documentation supporting that request; (4)
to require List B reservations for exchange-traded products to be made
at the request of the issuer (or its agent); (5) to require
Participants to release any symbol that it no longer has a reasonable
basis for believing that the issuer will list a security using the
symbol; (6) to require a reservation for an issuer to be transferred to
another Participant, if it decides to list on that Participant; (7) to
prohibit the reservation of more than one symbol for a potential
listing that is not an exchange-traded product; (8) to allow
Participants who have reserved a symbol for one issuer to be on the
waitlist for that symbol for another issuer; and (9) to eliminate the
costs of entry for new Participants to the Plan, consistent with
existing practice. In addition, Amendment No. 4 also includes several
technical and
[[Page 35271]]
ministerial proposed changes to provide current information about the
names and principal place of business of certain Participants to the
Plan, and also makes changes to update outdated language in Sections
IV(b)(1-3) and (c)(1) the Plan regarding reservations prior to the
original effective date of the Symbology Plan.\9\
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\9\ See Amendment No. 4 Notice, supra note 6, for a more
detailed description of the proposed changes. See also Modification
Letter, supra note 7.
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III. Discussion and Commission Findings
After careful review, the Commission is approving Amendment No. 4,
as modified, for the reasons discussed below. Section 11A of the Act
authorizes the Commission, by rule or order, to authorize or require
the self-regulatory organizations to act jointly with respect to
matters as to which they share authority under the Act in planning,
developing, operating, or regulating a facility of the national market
system.\10\ Rule 608 of Regulation NMS authorizes two or more SROs,
acting jointly, to file with the Commission proposed amendments to an
effective NMS plan,\11\ and further provides that the Commission shall
approve an amendment to an effective NMS plan if it finds that the
amendment is necessary or appropriate in the public interest, for the
protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect the mechanisms of, a
national market system, or otherwise in furtherance of the purposes of
the Act.\12\
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\10\ See 15 U.S.C. 78k-1(a)(3)(B).
\11\ See 17 CFR 242.608.
\12\ See 17 CFR 242.608(b)(2).
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The Commission believes that Amendment No. 4, as modified, is
consistent with the Act and meets the applicable standard provided in
Rule 608 of Regulation NMS.\13\ As described in the Notice, the Plan
Participants seek to amend the Symbology Plan to eliminate perpetual
reservations (except for test symbols), increase the number of List B,
limited-time symbol reservations, and make certain other amendments to
the Plan regarding the processes by which Plan Participants may make
symbol reservations.
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\13\ See 17 CFR 242.608.
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With respect to List A reservations, the Plan Participants have
agreed to release all their perpetual reservations and eliminate all
perpetual reservations, except for those used as test symbols. The
Participants stated that elimination of perpetual reservations was
proposed in connection with the changes to require that all
reservations be made at the request of an issuer. The Commission
believes that removing the List A perpetual reservations other than
test symbols will help to ensure that Participants can only reserve
symbols related to identified issuers, which should promote fair
competition among exchanges that list securities. Ensuring that
Participants can only reserve symbols related to identified issuers is
also appropriate in the public interest because it should enable
issuers to make listing decisions based on factors that relate to the
quality of the listing markets, rather than on considerations of symbol
reservation.
With respect to List B reservations, the Amendment proposes to
amend Section IV(b)(1)(B) to increase the number of symbol reservations
that a party can reserve from 1,500 to 2,500 symbols for symbols using
one, two or three characters, on the one hand, and for symbols using
four or five symbols, on the other hand. In the Notice, the Plan
Participants stated that this increase is ``necessary given the
substantial increase in the number of IPOs and other new listings,''
and noted that IPOs were at a 20-year low, with 62 IPOs that year, at
the time the Symbology Plan was approved in 2008, whereas more
recently, there were 480 and 1,058 IPOs in 2020 and 2021,
respectively.\14\ The Plan Participants also pointed to an increase in
recent years in the popularity of SPACs, which has similarly
necessitated the need to reserve of more symbols.\15\ The Plan
Participants stated that, given this current activity, the original
1,500 symbol reservation limits for one, two or three character
symbols, on the one hand, and for four or five character symbols, on
the other hand, are no longer appropriate. In approving the Symbology
Plan in 2008, the Commission discussed the history of ticker symbols
and noted that the increasing scarcity of available symbols highlighted
the need for a NMS plan to efficiently and fairly manage the supply of
ticker symbols.\16\ At that time, the Commission believed that the
allotment of 1,500 List B reservations for symbols using one, two or
three characters, on the one hand, and for symbols using four or five
symbols, on the other hand, was sufficient to allow Plan Participants
to reserve ``a sufficient number of symbols in the short-term for any
pending use.'' \17\ The Commission believes that it is appropriate for
the maintenance of fair and orderly markets to increase the number of
List B symbol reservations to accommodate recent listing activity.
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\14\ See Notice, supra, at 13028.
\15\ Specifically, according to the Participants, there were 613
SPAC IPOs in 2021 as compared to 248 SPAC IPOs in 2020, representing
a 247% increase. See id.
\16\ See Symbology Plan Approval Order, supra note 9, at 67219-
20. In the Symbology Plan Approval Order, the Commission stated that
several factors have been increasing the demand particularly for
one, two and three character symbols, including: increased listings
of innovative products such as exchange-traded funds; the move by
Nasdaq to begin using one, two and three character symbols; and the
proliferation of standardized options.
\17\ See Symbology Plan Approval Order at 67225.
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The Plan Participants also seek to make certain other amendments to
Section IV(b)(1)(B) of the Plan with respect to the process for symbol
reservations, including specifying that: (i) no party shall make a 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; (ii) 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 that it will utilize such symbol for the
listing of such security within the next 24 months; (iii) 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; (iv) the party shall release the symbol if it no longer
reasonably believes that the issuer will list a security using the
symbol; and (v) a party shall not reserve more than one symbol per
potential security listing that is not an exchange-traded product.\18\
The Plan Participants state that these changes are intended to ensure
that each party reserves a symbol in connection with a potential
listing. The Commission believes that the amendments to Section
IV(b)(1)(B) that put in place requirements for the request of a symbol
reservation are appropriate in the public interest because they should
help to ensure that the Plan operates in a fair and orderly manner by
requiring each party to reserve symbols in connection with a potential
listing. In addition, sub clauses (iii) and (v) would put in place a
process to allow exchanges to reserve multiple symbols at the request
of an issuer for exchange-traded products that
[[Page 35272]]
is listing multiple potential securities, as 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. The Commission believes that allowing exchanges to
reserve multiple symbols for issuers of such exchange-traded products
is appropriate in the public interest because it should reduce investor
confusion by allowing related exchange-traded products to potentially
have similar symbols. The Amendment also makes changes to the waitlist
provision in Section IV(b)(6)(c) that relate to the new List B
reservation process. Specifically, the Amendment would permit
Participants that already have a symbol reserved for a potential issuer
to be placed on the waitlist for the same symbol on behalf of another
potential issuer. The Commission believes that this change should
promote fair competition among the exchanges by allowing such
Participant to be placed on the waitlist, similar to other
Participants.
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\18\ 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 sub clauses (i) to (v) of Section
IV(b)(1)(B).
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The Participants also propose to amend Section I(c) of the Plan to
eliminate the costs of entry for new participants because, as the
Amendment notes, the pro rata costs for new participants have been de
minimis or zero in recent years. The Commission believes that amending
Section I(c) of the Plan to eliminate such costs should remove
impediments to, and perfect the mechanisms of, a national market
system, by removing what has become an administrative burden for new
participants. In addition, the Amendment makes other technical and
ministerial changes to clarify provisions that pertain only to the
initial operation of the Plan and to update Participant
information.\19\ The Commission believes that these changes are
appropriate in the public interest and consistent with the Act, because
they will provide clarifying and more accurate information about the
existing practices under the Plan and also updated information about
the Plan Participants.
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\19\ See Modification Letter, supra note 7.
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For the reasons discussed, the Commission finds that Amendment No.
4 to the Plan, as reflected in the Modification Letter, is consistent
with the requirements of the Act and the rules and regulations
thereunder, and in particular, Section 11A of the Act \20\ and Rule 608
\21\ thereunder in that Amendment No. 4 is appropriate in the public
interest, for the protection of investors and the maintenance of fair
and orderly markets, to remove impediments to, and perfect the
mechanisms of, a national market system.
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\20\ 15 U.S.C. 78k-1.
\21\ 17 CFR 242.608.
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IV. Conclusion
It is therefore ordered, pursuant to Section 11A of the Act,\22\
and Rule 608(b)(2) thereunder,\23\ that Amendment No. 4 to the Plan, as
modified, (File No. 4-533) is approved.
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\22\ 15 U.S.C. 78k-1.
\23\ 17 CFR 242.608(b)(2).
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-12396 Filed 6-8-22; 8:45 am]
BILLING CODE 8011-01-P
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