The New York Stock Exchange today joined the American Stock Exchange in opposing a proposal by the Nasdaq Stock Market to allow any company with a three-character symbol that transfers its securities to Nasdaq from another domestic market to continue using its existing three-character symbol. Traditionally, companies listed on the New York or American Stock Exchange use one-, two-, or three-letter symbols, whereas companies on Nasdaq use four- and five-letter symbols.
Delta Financial Corporation became the first company with a three-letter symbol (DFC) on Nasdaq when it transferred the listing of its common stock from Amex on March 22, 2007. As reported by American Public Media, DFC’s three-letter switch was approved as a one-time occurrence.
Nasdaq claims that allowing the portability of symbols will promote competition among exchanges, reduce investor confusion, and allow issuers to evaluate exchanges based on the most efficient trading platform and lowest investor costs without worrying about educating investors on a potential new symbol.
NYSE and Amex counter that the proposed rule change will cause investor confusion, incorrectly assumes an issuer owns its symbol, and is inconsistent with previous requests by the SEC that the exchanges work together to develop a symbol portability plan. (See the NYSE comment letter here and the Amex comment letter here).
Public comment is now closed on the Nasdaq proposal, and the SEC must now decide whether to approve the proposed rule change or begin proceedings to determine whether the proposed rule change should be disapproved.
