
[Federal Register: November 13, 2008 (Volume 73, Number 220)]
[Notices]               
[Page 67218-67235]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13no08-84]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58904; File No. 4-533]

 
Joint Industry Plan; Order Approving the National Market System 
Plan for the Selection and Reservation of Securities Symbols Submitted 
by the Chicago Stock Exchange, Inc., The Nasdaq Stock Market, Inc., 
National Association of Securities Dealers, Inc. (n/k/a Financial 
Industry Regulatory Authority, Inc.), National Stock Exchange, Inc., 
and Philadelphia Stock Exchange, Inc.

November 6, 2008.

I. Introduction

    On July 17, 2007, the Commission published for comment \1\ a 
detailed summary of two proposed plans for the purpose of the selection 
and reservation of securities symbols: the Five-Characters Plan and the 
Three-Characters Plan. On January 25, 2008, the Commission published 
Amendment No. 1 to the Three-Characters Plan for public comment.\2\ The 
proposed plans were filed jointly by two different groups of self-
regulatory organizations (``SROs'') pursuant to Rule 608 of Regulation 
NMS under the Securities Exchange Act of 1934 (``Act'') (``Rule 
608'').\3\ The Chicago Stock Exchange, Inc. (``CHX''), The Nasdaq Stock 
Market, Inc. (``Nasdaq''), National Association of Securities Dealers, 
Inc. (``NASD'') (n/k/a Financial Industry Regulatory Authority, Inc. 
(``FINRA'')),\4\ National Stock Exchange, Inc. (``NSX''), and 
Philadelphia Stock Exchange, Inc. (``Phlx'') filed the Five-Characters 
Plan.\5\ The American Stock Exchange LLC (``Amex''), Chicago Board 
Options Exchange, Incorporated (``CBOE''), International Securities 
Exchange, LLC (``ISE''), the New York Stock Exchange LLC (``NYSE''), 
and NYSE Arca, Inc. (``NYSE Arca'') filed the Three-Characters Plan.\6\
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    \1\ See Securities Exchange Act Release No. 56037 (July 10, 
2007), 72 FR 39096 (File Nos. 4-533 and 4-534) (``Symbology 
Notice''). The full text of each plan is also available to 
interested persons on the Commission's Web site at http://
www.sec.gov/rules/sro/nms.shtml#4-534 and http://www.sec.gov/rules/
sro/nms.shtml#4-533, respectively.
    \2\ See Securities Exchange Act Release No. 57171 (January 18, 
2008), 73 FR 4645.
    \3\ 17 CFR 242.608.
    \4\ On July 26, 2007, the Commission approved a proposed rule 
change filed by NASD to amend NASD's Certificate of Incorporation to 
reflect its name change to Financial Industry Regulatory Authority 
Inc., or FINRA, in connection with the consolidation of the member 
firm regulatory functions of NASD and NYSE Regulation, Inc. See 
Securities Exchange Act Release No. 56146 (July 26, 2007), 72 FR 
42190 (August 1, 2007) (SR-NASD-2007-053).
    \5\ FINRA, Nasdaq, NSX, and Phlx filed the Five-Characters Plan 
with the Commission on March 23, 2007. CHX, FINRA, Nasdaq, NSX, and 
Phlx filed a Supplement to this proposed plan on April 23, 2007. In 
the Supplement, CHX joined as a party proposing the Five-Characters 
Plan.
    \6\ On March 23, 2007, Amex, NYSE and NYSE Arca filed the Three-
Characters Plan with the Commission. In Amendment No. 1 to the 
Three-Characters Plan, filed on August 3, 2007, CBOE and ISE joined 
as parties to the proposed plan.
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    Although the two plans are identical in many respects, they differ 
on several significant matters. The primary difference between the two 
plans is their scope. The Three-Characters Plan would only cover one-, 
two-, and three-character symbols; the Five-Characters Plan would cover 
one-, two-, three-, four-, and five-character symbols. In addition, the 
plans differ with regard to the parties that are eligible to join the 
plan; the reservation rights for perpetual and limited-time 
reservations; the portability of symbols for issuers that move their 
listing from one market to another; the allocation of costs relating to 
the plan; and the process of withdrawing from the plan.
    The Commission received 61 comments on the proposed plans from 56 
commenters.\7\ Twenty-two

[[Page 67219]]

commenters generally supported the Three-Characters Plan or aspects 
thereof,\8\ while 22 commenters generally supported the Five-Characters 
Plan or aspects thereof.\9\ The remaining 12 commenters did not 
expressly support one plan or another.\10\
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    \7\ Letters to the Commission from Edward F. Tancer, Vice 
President & General Counsel, FPL Group, Inc., dated March 28, 2007 
(``FPL Letter''); Jason Korstange, SVP, Director of Corporate 
Communications, TCF Financial Corporation, dated March 28, 2007 
(``TCF Letter''); Timothy J. O'Donovan, Chairman of the Board, Chief 
Executive Officer, Wolverine World Wide, Inc., dated March 28, 2007 
(``Wolverine Letter''); Leo Liebowitz, Chairman and Chief Executive 
Officer, Getty Realty Corp., dated March 29, 2007 (``Getty 
Letter''); Edward W. Moore, Vice President, General Counsel & 
Secretary, RPM International Inc., dated March 29, 2007 (``RPM 
Letter''); Cathy Burzik, President and Chief Executive Officer, 
Kinetic Concepts, Inc., dated March 30, 2007 (``KCI Letter''); 
Clifton H. Morris, Jr., Chairman, AmeriCredit Corp., dated April 2, 
2007 (``AmeriCredit Letter''); David M. Brain, President and CEO, 
Entertainment Properties Trust, dated April 3, 2007 (``Entertainment 
Properties Letter''); Steven S. Fishman, Chairman, Chief Executive 
Officer and President, Big Lots, Inc., dated April 4, 2007 (``Big 
Lots Letter''); Mary J. McGinn, Secretary and Deputy General 
Counsel, The Allstate Corporation, dated April 5, 2007 (``Allstate 
Letter''); Eric W. Nodiff, Sr. V.P. and General Counsel, Cantel 
Medical Corp., dated April 9, 2007 (``Cantel Letter''); James C. 
Smith, Chairman and CEO, Webster Financial Corporation, dated April 
16, 2007 (``Webster Letter''); Michael Tenenbaum, PE, Trustee, 
Strategic Technologies Employees Pension Fund Trust, dated May 2, 
2007 (``Strategic Technologies Letter''); Craig D. Mallick, 
Corporate Secretary, United States Steel Corporation, dated May 4, 
2007 (``U.S. Steel Letter''); Bart J. Ward, Chief Executive Officer, 
Ward & Company, dated May 8, 2007 (``Ward Letter''); Jack Sennott, 
Senior Vice President and Chief Financial Officer, Darwin 
Professional Underwriters, Inc., dated May 8, 2007 (``Darwin 
Letter''); James J. Angel, Ph.D., CFA, Associate Professor of 
Finance, McDonough School of Business, Georgetown University, dated 
May 9, 2007 (``Angel Letter I''); M. Farooq Kathwari, Chairman, 
President and CEO, Ethan Allen Interiors, Inc., dated May 9, 2007 
(``Ethan Allen Letter''); Carol Kaufman, Sr. VP Legal Affairs, The 
Cooper Companies, Inc., dated May 14, 2007 (``Cooper Letter''); Jack 
R. Hartung, Chief Finance and Development Officer, Chipotle Mexican 
Grill, Inc., dated May 15, 2007 (``Chipotle Letter''); Larry A. 
Mizel, Chairman of the Board and Chief Executive Officer, M.D.C. 
Holdings, Inc., dated May 17, 2007 (``MDC Letter''); Will Matthews, 
dated May 21, 2007 (``Matthews Letter''); Stephen M. Klein, J.D., 
Chairman and Chief Executive Officer, Omni National Bank, dated May 
21, 2007 (``Omni Letter''); Edward J. Resch, Executive Vice 
President, Chief Financial Officer and Treasurer, State Street 
Corporation, dated May 21, 2007 (``State Street Letter''); Faith 
Pomeroy-Ward, Manager, Investor Relations, Adams Respiratory 
Therapeutics, dated May 22, 2007 (``Adams Letter''); Shayn Carlson, 
Director of Investor Relations, G&K Services, dated May 22, 2007 
(``G&K Letter''); Alan R. Spachman, dated May 22, 2007 (``Spachman 
Letter''); Mark L. Heimbouch, Chief Financial Officer and EVP, 
Jackson Hewitt Tax Service Inc., dated July 10, 2007 (``Jackson 
Hewitt Letter''); Daniel R. Coker, President & CEO, Amerigon 
Incorporated, dated July 31, 2007 (``Amerigon Letter''); Betsy 
Atkins, dated August 2, 2007 (``Atkins Letter''); Eric A. Blanchard, 
Senior Vice President, General Counsel and Secretary, United 
Stationers Supply Company, dated August 3, 2007 (``United Stationers 
Letter''); Albert A. Pimentel, Executive Vice President and Chief 
Financial Officer, Glu Mobile Inc., dated August 3, 2007 (``Glu 
Letter''); Ryan Ellis, Executive Director, American Shareholders 
Association, dated August 3, 2007 (``ASA Letter''); Rick Stewart, 
CEO, Amarin Corporation plc, dated August 9, 2007 (``Amarin 
Letter''); Steve Bene, Senior Vice President and General Counsel, 
Electronic Arts Inc., dated August 9, 2007 (``Electronic Arts 
Letter''); Bing Yeh, President & CEO, Silicon Storage Technology, 
Inc., dated August 10, 2007 (``Silicon Storage Letter''); Kathy 
Lanterman, Senior Vice President and Chief Financial Officer, 
Silicon Graphics, Inc., dated August 9, 2007 (``SGI Letter''); Paul 
Jennings, President and CEO, Innospec Inc., dated August 10, 2007 
(``Innospec Letter''); Harry W. Kellogg, Jr., Vice Chairman, SVB 
Financial Group, dated August 10, 2007 (``SVB Letter''); Arlen W. 
Gelbard, Chief Administrative Officer and General Counsel, E*Trade, 
dated August 10, 2007 (``E*Trade Letter''); MDS Office, Sobha 
Developers Ltd, dated August 10, 2007 (``Sobha Letter''); John 
Ritchie, Chief Financial Officer, Electronics For Imaging, dated 
August 10, 2007 (``EFI Letter''); Adi Bar-Lev, Director of IR, Top 
Image Systems Ltd., dated August 13, 2007 (``Top Image Letter''); 
Lonnie R. Brock, CFO, Double Eagle Petroleum Co., dated August 13, 
2007 (``Double Eagle Letter''); Joe Ovsenek, Senior Vice President, 
Corporate, Silver Standard Resources Inc., dated August 15, 2007 
(``Silver Standard Letter''); James J. Angel, Ph.D., CFA, Associate 
Professor of Finance, McDonough School of Business, Georgetown 
University, dated August 16, 2007 (``Angel Letter II''); Manisha 
Kimmel, Executive Director, Financial Information Forum, dated 
August 23, 2007 (``FIF Letter I''); Patrick J. Healy, Issuer 
Advisory Group, dated September 6, 2007 (``Issuer Advisory 
Letter''); S. Lee Clifford, President and CEO, SFB Market Systems, 
dated September 25, 2007 (``SFB Letter''); Joan C. Conley, Senior 
Vice President and Corporate Secretary, The NASDAQ Stock Market LLC, 
dated November 2, 2007 (``Nasdaq Letter I''); Barbara Sweeney, 
Senior Vice President and Corporate Secretary, The Financial 
Industry Regulatory Authority, Inc., dated November 27, 2007 
(``FINRA Letter''); Mary Yeager, Assistant Secretary, New York Stock 
Exchange, LLC, dated January 15, 2008 (``NYSE Letter''); James J. 
Angel, Ph.D., CFA, Associate Professor of Finance, McDonough School 
of Business, Georgetown University, dated February 13, 2008 (``Angel 
Letter III''); Manisha Kimmel, Executive Director, Financial 
Information Forum, dated February 14, 2008 (``FIF Letter II''); 
Marianne Brown, Chief Executive Officer, Omgeo, LLC, dated February 
15, 2008 (``Omgeo Letter''); Joan Conley, Senior Vice President & 
Corporate Secretary, The NASDAQ Stock Market LLC, dated February 26, 
2008 (``Nasdaq Letter II''); John Panchery, Managing Director, Art 
Trager, Vice President, and Ann Vlcek, Managing Director and 
Associate General Counsel, Securities Industry and Financial Markets 
Association, dated February 28, 2008 (``SIFMA Letter''); Julian 
Rainero, Partner, Bracewell & Guiliani LLP, dated March 10, 2008 
(``Bracewell & Guiliani Letter''); Jamie Shay, Head of SWIFT 
Standards, Society for Worldwide Interbank Financial 
Telecommunication, dated March 18, 2008 (``SWIFT Letter''); Scott 
Atwell, FPL Global Steering Committee Co-Chair, FIX Protocol, dated 
March 24, 2008 (``FIX Letter''); and Thomas P. Moran, Associate Vice 
President & Associate General Counsel, Nasdaq, dated March 26, 2008 
(``Nasdaq Letter III'').
    \8\ See FPL Letter, TCF Letter, Wolverine Letter, Getty Letter, 
Kinetic Concepts Letter, AmeriCredit Letter, Entertainment 
Properties Letter, Big Lots Letter, Allstate Letter, Cantel Letter, 
Webster Letter, Strategic Technologies Letter, U.S. Steel Letter, 
Ward Letter, Darwin Letter, Ethan Allen Letter, Cooper Letter, 
Chipotle Letter, MDC Letter, State Street Letter, Jackson Hewitt 
Letter, and NYSE Letter.
    \9\ See Matthews Letter, Omni Letter, Adams Letter, G&K Letter, 
Amerigon Letter, Atkins Letter, United Stationers Letter, Glu 
Letter, ASA Letter, Amarin Letter, Electronic Arts Letter, Silicon 
Storage Letter, SGI Letter, Innospec Letter, SVB Letter, E*Trade 
Letter, Sobha Letter, EFI Letter, Top Image Letter, Double Eagle 
Letter, Silver Standard Letter, Nasdaq Letter I, and Nasdaq Letter 
II.
    \10\ See RPM Letter, Angel Letter I, Angel Letter II, Angel 
Letter III, Spachman Letter, FIF Letter I, FIF Letter II, Issuer 
Advisory Letter, SFB Letter, FINRA Letter, Omgeo Letter, SIFMA 
Letter, Bracewell & Guiliani Letter, SWIFT Letter, and FIX Letter.
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    This order approves the Five-Characters Plan, with changes and 
subject to conditions as the Commission deems necessary or appropriate, 
thus authorizing CHX, FINRA, Nasdaq, NSX, and Phlx to act jointly to 
implement the Five-Characters Plan, as modified herein, as a means of 
facilitating a national market system in accordance with the 
requirements of Section 11A of the Act.\11\ This order also requires, 
within 60 days of this approval order, that any SRO that chooses to 
list securities or to designate securities for quoting on a quotation 
medium to join the Five-Characters Plan, as modified herein, and to act 
jointly with CHX, FINRA, Nasdaq, NSX, and Phlx to implement the 
approved plan.\12\ The approved Five-Characters Plan is attached here 
as Appendix A.
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    \11\ 15 U.S.C. 78k-1. See also 17 CFR 242.608(b)(2).
    \12\ 15 U.S.C. 78k-1(a)(3)(B).
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II. Background

A. Section 11A of the Act

    In 1975, Congress directed the Commission, through the enactment of 
Section 11A of the Act,\13\ to facilitate the establishment of a 
national market system to link together the individual markets that 
trade securities. Congress found the development of a national market 
system to be in the public interest and appropriate for the protection 
of investors and the maintenance of fair and orderly markets to assure 
fair competition among the exchange markets.\14\ Section 11A(a)(3)(B) 
of the Act directs the Commission, ``by rule or order, to authorize or 
require self-regulatory organizations to act jointly with respect to 
matters as to which they share authority under this title in planning, 
developing, operating, or regulating a national market system (or a 
subsystem thereof) or one or more facilities.'' \15\ The Commission's 
approval of a national market system plan is conditioned upon a finding 
that the proposed plan 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 
mechanism of, a national market system, or otherwise in furtherance of 
the purposes of the Act.'' \16\
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    \13\ 15 U.S.C. 78k-1.
    \14\ 15 U.S.C. 78k-1(a)(1)(C).
    \15\ 15 U.S.C. 78k-1(a)(3)(B).
    \16\ 17 CFR 242.608(b)(2). See also 15 U.S.C. 78k-1(a).
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B. Limited Symbol Supply

    Pursuant to Rule 601 of Regulation NMS under the Act,\17\ all SROs 
are required to report every trade in listed equity securities \18\ and 
Nasdaq securities \19\ made through their facilities, and to make such 
information public. Each SRO reports every transaction to the ticker 
tape using the ticker symbol for that security, the volume of the 
trade, and the price of the trade. Currently, there are three ticker 
tapes: Tape A reports the stocks that are listed on NYSE, Tape B 
reports the

[[Page 67220]]

stocks that are listed on Amex, as well as securities listed on any 
other national securities exchange (except securities also listed on 
NYSE and Nasdaq), and Tape C reports the stocks that are listed on 
Nasdaq. Tapes A and B disseminate market information pursuant to the 
Consolidated Tape Association Plan (``CTA Plan''), while Tape C 
disseminates market information pursuant to the Nasdaq Unlisted Trading 
Privileges Plan.
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    \17\ 17 CFR 242.601.
    \18\ 17 CFR 242.600(b)(34) defines ``listed equity security'' as 
``any equity security listed and registered, or admitted to unlisted 
trading privileges, on a national securities exchange.''
    \19\ 17 CFR 242.600(b)(41) defines ``Nasdaq security'' as ``any 
registered security listed on The Nasdaq Stock Market, Inc.''
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    Securities symbols are a key element in the operation of a national 
market system and essential to the dissemination of trade information 
in a common format. The term ``ticker symbol'' originates from the 
ticker tape.\20\ Prior to the introduction of the ticker, it was 
customary for messengers to manually disseminate quotations.\21\ In 
1867, an employee of the NYSE developed the stock ticker.\22\ A system 
of symbols and abbreviations developed as the only practical method for 
reporting transactions, because the full description of the issuer, 
security, number of shares sold, the price, and other market data would 
slow the dissemination of trade information so that the ticker would 
fall behind the market.\23\ In December 1966, the ticker tape was fully 
automated.\24\
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    \20\ The ticker tape started in 1867, when all trades made on an 
exchange were sent out by telegraph and printed on a piece of paper. 
Although the process is now automated, the securities industry 
participants continue to refer to the electronic reporting of 
information as the ``tape.'' See Hal McIntyre, How the US Securities 
Industry Works, 194-95 (The Summit Group Press) (2000).
    \21\ See S. S. Huebner, Ph.D., Sc.D., The Stock Market, 218 
(Appleton-Century-Crofts, Inc.) (1934).
    \22\ E.A. Calahan. See George L. Leffler, Ph.D., The Stock 
Market, 162 (The Ronald Press Company) (1951).
    \23\ See note 21 supra at 222. The first ticker was very slow 
and not practical, until Thomas A. Edison, another employee of the 
NYSE, improved its speed and efficiency. See note 22 supra at 162.
    \24\ See Richard J. Teweles and Edward S. Bradley, The Stock 
Market, 148 (John Wiley & Sons, Inc.) (1998).
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    Recently, concerns about the scarcity of available symbols have 
highlighted the need for a symbol reservation national market system 
plan to efficiently and fairly manage symbol supply. As the securities 
markets have grown over the years, the availability of one-, two-, and 
three-character symbols has diminished.\25\ Several factors have been 
increasing the demand for one-, two-, and three-character symbols. In 
recent years, exchanges have begun listing new and innovative products, 
such as exchange-traded funds, that are now competing with listed 
companies for symbols.
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    \25\ There are 26 combinations for one-character symbols, 676 
combinations for two-character symbols, and 17,576 combinations for 
three-character symbols, for a total of 18,278 one-, two-, and 
three-character symbols.
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    In addition, Nasdaq, which when operated as a facility of NASD (n/
k/a FINRA) \26\ only listed securities with four- and five-character 
symbols, has begun using two- and three-character symbols and has 
expressed its desire to use one-character symbols as well for Nasdaq-
listed issuers. It has been the practice of the NYSE to list companies 
using one-, two-, and three-character symbols and of other exchanges 
(including Amex and regional exchanges) to list companies using two- 
and three-character symbols. Until recently, Nasdaq was the only 
listing market that did not assign securities one-, two-, or three-
character symbols; instead, Nasdaq had assigned securities it listed 
four- and five-character symbols. In November 2005, however, Nasdaq 
announced its intention to begin listing companies with one-, two-, and 
three-character symbols.\27\ Since that time, Nasdaq has made a series 
of announcements detailing its plans, and has worked with the industry 
to test trading systems to ensure the proper functionality for such 
symbols.\28\ In March 2007, Nasdaq filed with the Commission a proposed 
rule change to allow companies transferring their listings to Nasdaq to 
retain their three-character symbols.\29\ And, in April 2008, Nasdaq 
filed with the Commission an immediately effective proposed rule change 
to allow an issuer with a two-character symbol to transfer its listing 
to Nasdaq and retain its two-character symbol.\30\
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    \26\ Nasdaq began operations as a national securities exchange 
in Nasdaq-listed securities on August 1, 2006, and in non-Nasdaq-
listed securities on February 12, 2007. See http://www.nasdaq.com/
about/FAQsExchange.stm. See also Securities Exchange Act Release No. 
53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 
10-131).
    \27\ See Head Trader Alert 2005-133 (November 14, 2005), 
available at http://www.nasdaqtrader.com.
    \28\ See e.g., Nasdaq Head Trader Alerts 2006-144 (September 29, 
2006), 2006-193 (November 16, 2006), 2006-201 (December 6, 2006), 
and 2007-008 (January 25, 2007), each available at http://
www.nasdaqtrader.com.
    \29\ See Securities Exchange Act Release No. 55563 (March 30, 
2007), 72 FR 16391 (April 4, 2007) (SR-NASDAQ-2007-031) (notice for 
the proposal to allow three-character symbol portability for 
companies transferring their listings to Nasdaq). The Commission 
approved this proposal in July 2007. See Securities Exchange Act 
Release No. 56028 (July 9, 2007), 72 FR 38639 (July 13, 2007) 
(``Nasdaq Three-Character Portability Order''). See also Securities 
Exchange Act Release No. 55519 (March 26, 2007), 72 FR 15737 (April 
2, 2007) (SR-NASDAQ-2007-025) (allowing a single company, Delta 
Financial Corp., to retain its three-character symbol upon 
transferring its listing from Amex to Nasdaq).
    \30\ See Securities Exchange Act Release No. 57696 (April 22, 
2008), 73 FR 22987 (April 28, 2008) (SR-NASDAQ-2008-034). The 
Commission notes that its approval of the Five-Characters Plan, as 
modified herein, is consistent with this change and with its 
approval of the Nasdaq Three-Character Portability Order. See id. As 
discussed further below, see infra notes 105-117 and accompanying 
text, the approved plan would allow the automatic portability of all 
one-, two-, three-, four-, and five-character symbols of issuers 
transferring their listing from one exchange to another.
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    Finally, the proliferation of standardized options has decreased 
the availability of three-character symbols.\31\ Developing a formal 
process to reserve, select, and allocate symbols fairly and efficiently 
among the listing markets should help promote a fair and orderly 
national market system and protect investors.
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    \31\ The options exchanges have expressed their intention to 
shift to a different symbology. See http://www.theocc.com/
initiatives/symbology/default.jsp.
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C. Weaknesses in the Existing Reservation System

    Currently, the listing markets assign securities symbols under an 
informal understanding among the markets. Under this system, each SRO 
keeps its own records of reserved symbols. If an SRO wishes to reserve 
a particular symbol, the SRO will consult its own list of reserved 
symbols and then, if it believes that the symbol is available, will 
notify the other SROs that it is reserving that symbol. If no other SRO 
objects, then the listing SRO has successfully reserved that symbol and 
each SRO would be responsible for updating its own records of reserved 
symbols accordingly.
    There are several weaknesses in the current informal system. The 
absence of universal reservation records may lead to confusion about 
the availability of certain symbols and may result in disputes between 
listing markets about the availability of particular symbols. Any such 
confusion or disagreement between the listing markets could disrupt the 
listing process or raise the potential for symbol duplication and 
investor confusion.
    In addition, under the existing system, listing markets may reserve 
an excess amount of symbols indefinitely, which could exacerbate the 
strain on symbol supply. Market fears about supply constraints and 
competition for listings could drive listing markets to reserve an 
excess amount of symbols, either to protect their interests in the 
event of needing such symbols in the future or to give themselves 
advantages over their competitors in securing future listings. For 
example, a listing market could use the existing symbol reservation 
system to withhold unused symbols from their competitors, trade 
reserved symbols only with certain, allied exchanges, or use their 
power to

[[Page 67221]]

withhold desired symbols to compel other listing markets not to trade 
symbols with their direct competitors.
    Finally, the existing system does not universally permit issuers 
transferring their listing to a new exchange to keep their ticker 
symbols. Thus, the original listing market and the new listing market 
for a transferred listing could become embroiled in a dispute over the 
right to use the issuer's ticker symbol, which could disrupt trading in 
that security, and such uncertainty could affect an issuer's decision 
in selecting a listing venue or moving from one venue to another.
    Disagreements over the use of securities symbols have arisen in the 
past. For example, in 1999, NYSE, Amex, and Nasdaq were involved in a 
dispute regarding the symbol ``Q,'' which Amex and Nasdaq planned to 
use for the Nasdaq 100 Trust. However, NYSE claimed that it had 
reserved that symbol and sued to enjoin the use of that symbol. Amex 
and Nasdaq eventually agreed to use a different symbol for the Nasdaq 
100 Trust.\32\
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    \32\ See, e.g., Big Board Drops its Lawsuit Against Amex, The 
New York Times, March 10, 1999, Section C, p. 10.
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    These weaknesses in the existing informal symbol reservation system 
could potentially have significant market consequences as exchanges 
compete more aggressively for listings and the supply of available 
symbols becomes more restricted over time. For this reason, the 
Commission believes that it is necessary to adopt a national market 
system plan for reserving and allocating symbols among the SROs to 
maintain fair and orderly markets. Consistent with the principles of 
Section 11A of the Act, in February 2005, Commission staff requested 
the listing markets to commence joint discussions to develop such a 
national market system plan.\33\ A national market system plan for 
symbology should mitigate confusion or disagreement about the rights to 
particular securities symbols and should allow symbols to be used in a 
manner that is efficient and promotes competition between the listing 
markets.
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    \33\ See Letters from Annette L. Nazareth, then Director of the 
Division of Market Regulation, Commission, to Amex, Boston Stock 
Exchange (``BSE''), CBOE, CHX, ISE, Nasdaq, NASD, NSX, NYSE, Pacific 
Exchange (the predecessor to NYSE Arca) and Phlx, dated February 7, 
2005 (``February 2005 Letters'').
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III. Discussion

    In the notice publishing for comment both the Three-Characters Plan 
and the Five-Characters Plan, the Commission asked for comments on 
whether it should approve one or two plans. Four commenters provided 
feedback on this issue and each supported the approval of a single 
symbology plan.\34\ One of these commenters stated that having two 
different plans for short and long tickers adds needless complexity to 
an already complex market structure and that the additional complexity 
of two plans would create increased costs for SROs as well as 
additional costs to the Commission to regulate two plans, which would 
be borne ultimately by taxpayers and investors.\35\ The Commission 
agrees with these commenters that approving two plans for the 
reservation of symbols would place undue costs and burdens on listing 
SROs, including new entrants. The Commission also notes that, 
currently, the proposed plans both establish a process for the 
selection and reservation of one-, two-, and three-character securities 
symbols. Therefore, approval of both plans would establish two 
competing, inconsistent systems for selecting and reserving one-, two-, 
and three-character symbols, which the Commission believes would not be 
in furtherance of the purposes of the Act. The Commission finds that 
approving a single plan, rather than both plans, 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 and is in 
furtherance of the purposes of the Act because a single plan would 
promote the smooth and orderly operation of the marketplace.
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    \34\ See FIF Letter I, FIF Letter II at 1, Angel Letter II at 3, 
Angel Letter III at 1, Omgeo Letter at 1, and SWIFT Letter.
    \35\ See Angel Letter II at 3 and Angel Letter III at 2.
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    After carefully considering the proposed plans and the issues 
raised by the comment letters, the Commission has determined to 
approve, pursuant to Section 11A(a)(3)(B) of the Act \36\ and Rule 
608,\37\ the Five-Characters Plan, with changes and subject to 
conditions set forth herein as the Commission has deemed necessary or 
appropriate.\38\ As discussed in detail below, in approving the Five-
Characters Plan, the Commission finds that the Five-Characters Plan is 
necessary and appropriate in the public interest and in furtherance of 
the purposes of the Act. The Five-Characters Plan is more comprehensive 
than the Three-Characters Plan because it covers one-, two-, three-, 
four-, and five-character symbols. The Commission also believes it 
would better promote fair competition among exchanges that list 
securities because it does not constrain the portability of symbols (as 
the Three-Characters Plan does), but instead makes all symbols 
automatically portable when a listed issuer transfers its listing to 
another exchange. This portability would enable issuers to make listing 
decisions based on factors that relate to the quality of the listing 
markets such as trading quality, costs, and branding, rather than on 
considerations of symbol portability. In summary, the Five-Characters 
Plan provides a system for reserving and allocating securities symbols 
that should provide clarity and order to the symbol reservation 
process, mitigate the current constraints on symbol supply, and promote 
fair competition between the various SROs.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78k-1(a)(3)(B).
    \37\ 17 CFR 242.608.
    \38\ The Commission has modified the proposed Five-Characters 
Plan to make the following changes: (i) To modify the plan to state 
that, 90 days following the Commission's approval, it will be the 
exclusive means of allocating and using symbols of one-, two-, 
three-, four-, and five-characters in length and to specify that 
there is no difference between capital and lowercase letters (see 
infra note 41 and accompanying text); (ii) to modify the start date 
for the initial reservation process from upon Commission approval of 
the plan to 60 days following the Comission's approval (see infra 
notes 141-143 and 190-191 and accompanying text); (iii) to limit the 
use of one-, two-, and three-character symbols for securities listed 
on a national securities exchange and to restrict securities trading 
over-the-counter to using only four- or five-character symbols (see 
infra notes 85-89 and accompanying text); and (iv) to clarify that 
securities that de-list and trade on the over-the-counter market 
would not have portability rights for the original listing symbol 
(see infra notes 168-172 and accompanying text).
---------------------------------------------------------------------------

    This order authorizes CHX, FINRA, Nasdaq, NSX, and Phlx to act 
jointly to implement the Five-Characters Plan, as modified herein, as a 
means of facilitating a national market system in accordance with the 
requirements of Section 11A of the Act.\39\ This order also requires 
any SRO that chooses to list securities on its market or to designate 
securities for quoting on a quotation medium to join the Five-
Characters Plan and to act jointly with other parties to the plan to 
implement the approved plan.\40\
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78k-1.
    \40\ 15 U.S.C. 78k-1(a)(3)(B). The Commission did not receive 
any comments regarding whether it should require SROs to join an 
approved plan.
---------------------------------------------------------------------------

    In connection with requiring SROs that list, or designate for 
quoting, securities, the Commission is also modifying the plan to 
provide that, 90 days from the date of this Order, the Five-Characters 
Plan shall be the exclusive means of allocating and using symbols of 
one-, two-, three-, four-, or five-characters in length. In addition, 
for clarity, the Commission is specifying that there will be no 
difference between capital letters and lowercase letters,

[[Page 67222]]

thus limiting the choices of letters to 26. The Commission believes 
these changes are necessary and appropriate for the dissemination of 
trade information in a common format.\41\
---------------------------------------------------------------------------

    \41\ The Commission notes that, while the proposed plans were 
silent on these points, this clarification is necessary to avoid the 
possibility of confusion regarding the scope of the approved plan.
---------------------------------------------------------------------------

A. Five-Characters Plan's Consistency With Section 11A of the Act

    Many of the provisions of the proposed Five-Characters Plan are 
similar or identical to parallel provisions in the proposed Three-
Characters Plan. Particularly, the plans would establish the 
Intermarket Symbol Reservation Authority (``ISRA'') composed of plan 
participants and set forth how it would be administered. Both plans 
also have the same provisions regarding the use of a third-party 
processor and a symbol reservation database, the general process of 
reserving perpetual and limited-time reservations, 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, the non-transferability of 
rights under the plan, and the process of amending the plan.\42\ 
Despite these significant areas of consensus, however, there are 
several important differences between the proposed plans.
---------------------------------------------------------------------------

    \42\ See discussion infra Part III(B) for a discussion of these 
provisions.
---------------------------------------------------------------------------

    Many of the commenters that favored the proposed Five-Characters 
Plan asserted that it would enhance competition among markets by 
putting all exchanges on a fair and level playing field and would 
reduce the potential for investor confusion by allowing a fair 
framework for symbol portability.\43\ Several commenters stated that 
the proposed Five-Characters Plan would give all exchanges equal rights 
under the proposal.\44\ Some of these commenters also stated that the 
proposed Five-Characters Plan would provide greater choice for public 
companies and cause less confusion for investors.\45\ One commenter 
asserted that the proposed Five-Characters Plan is inherently more fair 
and reasonable than the proposed Three-Characters Plan.\46\
---------------------------------------------------------------------------

    \43\ See Amerigon Letter, United Stationers Letter, Glu Letter, 
Electronic Arts Letter, Silicon Storage Letter, Silicon Graphics 
Letter, Innospec Letter, SVB Letter, E*Trade Letter, EFI Letter, Top 
Image Letter, Double Eagle Letter, and Silver Standard Letter.
    \44\ See Adams Letter, Atkins Letter, and Sobha Letter. See also 
ASA Letter, which stated that fair and equal competition is the core 
of the Five-Characters Plan.
    \45\ See Amerigon Letter, United Stationers Letter, Glu Letter, 
Amarin Letter, Electronic Arts Letter, Silicon Graphics Letter, SVB 
Letter, E*Trade Letter, Top Image Letter, Double Eagle Letter, and 
Silver Standard Letter.
    \46\ See Matthews Letter.
---------------------------------------------------------------------------

    The Commission agrees with the commenters supporting the Five-
Characters Plan and finds that, as discussed in greater detail below, 
the Five-Characters Plan, as modified herein, is consistent with 
Section 11A of the Act, and is necessary and appropriate in the public 
interest, for the protection of investors and the maintenance of fair 
and orderly markets.
1. Scope of Plan
    One primary difference between the two proposed plans relates to 
scope: the proposed Three-Characters Plan would only cover one-, two-, 
and three-character symbols; the Five-Characters Plan, on the other 
hand, would cover the reservation and allocation of all one-, two-, 
three-, four-, and five-character symbols. Both of the proposed plans 
would cover only root symbols, without any suffix or special 
conditional identifier.\47\
---------------------------------------------------------------------------

    \47\ See Section IV(a) of the proposed plans.
---------------------------------------------------------------------------

    The Commission believes that the Five-Characters Plan, which would 
establish a uniform system for the selection and reservation of symbols 
(``Symbol Reservation System'') of one-, two-, three-, four-, or five-
character securities symbols,\48\ is more comprehensive, and therefore 
offers a more efficient and effective mechanism for allocating symbols 
than the Three-Characters Plan.\49\ The Three-Characters Plan would 
leave unanswered the appropriate methodology for allocating four- and 
five-character symbols.
---------------------------------------------------------------------------

    \48\ See Section I(b) of the Five-Characters Plan. The Five-
Characters Plan would cover only root symbols (i.e., without any 
suffix or special conditional identifier) that are NMS securities as 
currently defined in Rule 600(a)(46) of Regulation NMS under Act and 
any other equity securities quoted, traded, and/or trade reported 
through an SRO facility. See Preamble and Sections I(b) and IV(a) of 
the Five-Characters Plan. The Three-Characters Plan would cover only 
root symbols of one-, two- or three-characters for Network A and 
Network B Eligible Securities (as defined in the CTA Plan) and 
listed options reported to OPRA. The Three-Characters Plan states 
that, for listed equity securities, no such symbols would be 
allocated or used other than for Network A or Network B Eligible 
Securities. See Sections I(b) and IV(a) of the Three-Characters 
Plan.
    \49\ As discussed below, one commenter suggested expanding the 
length of securities symbols to 10 or 12 characters. See Angel 
Letter III at 3. Currently, the markets only use root symbols of 
one- through five-characters in length.
---------------------------------------------------------------------------

    Although Nasdaq is currently the primary listing exchange for 
issuers using four- and five-character symbols,\50\ the Commission 
believes that it will further the purposes of the Act to approve a plan 
for the reservation and allocation of symbols with one-, two-, three-, 
four-, and five-character symbols in order to permit all exchanges to 
begin utilizing such symbols, particularly in light of the limited 
availability of one-, two-, and three-character symbols. Indeed, the 
Commission believes that allowing all exchanges to list four- and five-
character securities symbols should help ensure that the supply of 
available securities symbols does not become constrained.
---------------------------------------------------------------------------

    \50\ The Commission notes that NYSE Arca currently lists an 
issuer with a four-character security symbol, namely Golden Cycle 
Gold Corporation (ticker symbol: GCGC).
---------------------------------------------------------------------------

    Some commenters urged a broader scope than that proposed in either 
plan. Seven commenters advocated the adoption of a national market 
system plan that provides a single suffix symbology across all 
SROs.\51\ In response, Nasdaq had initially commented that the plan 
should only cover root symbols because the use of symbol suffixes is 
unique to individual markets.\52\ Subsequently, however, Nasdaq urged 
that the Commission commence a process for adopting a uniform inter-
market equity symbol suffix plan.\53\ The Commission is supportive of 
considering such an initiative. To avoid a delay in the implementation 
of a symbology national market system plan for root symbols, however, 
the Commission believes it is appropriate to consider any such 
initiative separately following the approval of the Five-Characters 
Plan. Accordingly, the Commission finds the scope of the Five-
Characters Plan in its focus on root symbols is appropriate in the 
public interest and that it will further the purposes of the Act.
---------------------------------------------------------------------------

    \51\ See FIF Letter I, FIF Letter II at 1, Angel Letter II at 3, 
Angel Letter III at 1, Omgeo Letter at 1, SIFMA Letter, Bracewell & 
Guiliani Letter, SWIFT Letter, and FIX Letter. One commenter also 
noted that current inconsistencies in suffix symbology and condition 
identifiers make it difficult for data vendors to pass through 
accurate data, which can cause confusion and loss for investors. See 
Angel Letter I at 8 and Angel Letter III at 1. This commenter also 
believed that the plan should cover, in addition to equity 
securities, options, futures, securities futures, mutual funds, and 
indices and that it should incorporate representation from the 
derivatives exchanges, issuers, investors, and brokers. See Angel 
Letter I at 10, Angel Letter II at 4, and Angel Letter III at 1. In 
addition, this commenter urged the development of a new symbology 
plan in what he anticipates will be a global trading environment. 
See Angel Letter III at 2.
    \52\ See Nasdaq Letter II at 3.
    \53\ See Nasdaq Letter III. See also Head Trader Alert 2008-36 
(March 27, 2008), available at http://www.nasdaqtrader.com.
---------------------------------------------------------------------------

2. Parties to the Plan
    The proposed plans have different criteria for determining the 
eligibility for parties to join their plan. The

[[Page 67223]]

proposed Three-Characters Plan would only allow an SRO to join the plan 
if it maintains a market for the listing and trading of securities that 
are identified by one-, two-, or three-character symbols and if their 
listed equity securities are also ``Network A'' or ``Network B'' 
``Eligible Securities'' as those terms are defined in the CTA Plan.\54\
---------------------------------------------------------------------------

    \54\ The CTA Plan defines ``Network A Eligible Securities'' to 
mean Eligible Securities listed on NYSE and ``Network B Eligible 
Securities'' to mean, in relevant part, Eligible Securities listed 
on the Amex, BSE, CBOE, CHX, ISE, NSX, NYSE Arca, Phlx or on any 
other exchange other than Nasdaq, but not also listed on NYSE.
---------------------------------------------------------------------------

    The Five-Characters Plan, on the other hand, would allow any SRO to 
join the plan as long as it maintains a market for the listing and 
trading of securities that are identified by one-, two-, three-, four-, 
or five-character symbols.\55\ A party would also be required to have 
the actual technical and physical capability through its facilities to 
immediately quote and report trades in securities either using one-, 
two-, or three-character symbols, if it seeks to reserve symbols of 
one-, two-, or three-characters in length, or using four-or five-
character symbols, if it seeks to reserve symbols of four-or five-
characters in length.\56\ In addition, this plan would require, as 
conditions to becoming a new participant, that an SRO pay a 
proportionate share of the aggregate development costs and sign a 
current copy of the plan.\57\
---------------------------------------------------------------------------

    \55\ See also supra note 48.
    \56\ See Section I(b) of the Five-Characters Plan.
    \57\ See Section I(c) of the Five-Characters Plan. For 
additional discussion regarding the plan's provision relating to 
costs, see discussion infra notes 118-124 and accompanying text.
---------------------------------------------------------------------------

    Many commenters argued that Nasdaq should not be allowed to list 
one-, two-, and three-character symbols because such symbols are 
indicative of an NYSE listing.\58\ Some of these commenters argued that 
an issuer's use of a one-, two-, or three-character symbol signaled the 
NYSE brand and ``companies listed on NYSE meet the highest corporate 
governance and financial standards in the world;'' \59\ consequently, 
some stated, the Nasdaq issuers' use of such symbols could lead to 
investor confusion.\60\ One such commenter, a trustee and portfolio 
manager of a small pension fund, stated that it relies on the use of 
one-, two-, and three-character symbols to identify NYSE securities and 
makes investment decisions based on such reliance, citing the financial 
reporting requirements and stability of earnings of NYSE securities; 
this commenter further stated that it generally performs ``an extra 
level of scrutiny in view of the longevity of firms that have been 
listed in the over the counter market'' because it presumes that those 
securities are not NYSE-listed securities.\61\ NYSE also argued that 
Nasdaq's attempt to use three-character symbols exacerbates the 
existing supply problems without justification.\62\
---------------------------------------------------------------------------

    \58\ See FPL Letter, TCF Letter, Wolverine Letter, Getty Letter, 
KCI Letter, AmeriCredit Letter, Entertainment Properties Letter, Big 
Lots Letter, Allstate Letter, Cantel Letter, Webster Letter, 
Strategic Technologies Letter, U.S. Steel Letter, Ward Letter, 
Darwin Letter, Ethan Allen Letter, Cooper Letter, Chipotle Letter, 
State Street Letter, and Jackson Hewitt Letter. See also NYSE Letter 
at 2.
    \59\ See Allstate Letter; see also, e.g., FPL Letter, TCF 
Letter, Wolverine Letter, Getty Letter, KCI Letter, AmeriCredit 
Letter, Entertainment Properties Letter, Big Lots Letter, Cantel 
Letter, Webster Letter, Strategic Technologies Letter, U.S. Steel 
Letter, Darwin Letter, Ethan Allen Letter, Cooper Letter, Chipotle 
Letter, State Street Letter, and Jackson Hewitt Letter. See also 
NYSE Letter at 4.
    \60\ See TCF Letter, Wolverine Letter, Big Lots Letter, Ward 
Letter. See also NYSE Letter at 3.
    \61\ See Strategic Technologies Letter. The NYSE Letter also 
argued that investors, securities issuers, and the public rely on 
the different symbol lengths to distinguish NYSE and Nasdaq 
securities. See NYSE Letter at 2.
    \62\ See NYSE Letter at 5.
---------------------------------------------------------------------------

    Many other commenters, however, challenged these assertions and 
argued that Nasdaq should have the same rights to list one-, two-, or 
three-character symbols as NYSE and any other exchange.\63\ One 
commenter noted that one-, two-, and three-character ticker symbols 
have previously been used by Amex and other regional exchanges and that 
commenters implying that one-, two-, and three-character symbols are 
associated only with NYSE ignore current practice and the historical 
record.\64\ Another commenter stated that, due to the fact that markets 
can no longer claim a majority share of the trading in their listed 
securities, the correlation of the number of letters in a ticker symbol 
and its listing on a particular exchange is an increasingly obsolete 
consideration.\65\ One commenter also noted that NYSE and Amex issuers, 
similarly, should have the flexibility to use longer ticker symbols 
that may be more readily identifiable with their company.\66\
---------------------------------------------------------------------------

    \63\ See G&K Letter, Amerigon Letter, United Stationers Letter, 
Glu Letter, Electronic Arts Letter, Silicon Graphics Letter, E*Trade 
Letter, Silicon Storage Letter, Innospec Letter, EFI Letter, and 
Nasdaq Letter I. See also SVB Letter, Top Image Letter, and Double 
Eagle Letter, which state that all exchanges and issuers should be 
able to list three- or fewer character symbols.
    \64\ This commenter stated that Amex, BSE, and other regional 
exchanges have used one- or two-character ticker symbols in the 
past. See Angel Letter I at 6, Angel Letter II at 2, and Angel 
Letter III at 2. This commenter also argued that shorter ticker 
symbols should go to the most actively-traded stocks, some of which 
are Nasdaq-listed, because the reduced typing and remembering effort 
required for such symbols would make it a more economically 
efficient solution. See Angel Letter I at 5.
    \65\ See Issuer Advisory Letter at 2. See also Angel Letter I at 
4.
    \66\ See Angel Letter II at 3.
---------------------------------------------------------------------------

    The Commission believes that any SRO with the capacity to maintain 
a market for the listing of securities that are identified by one-, 
two-, three-, four-, or five-character symbols should be able to 
reserve those symbols.\67\ As noted above, the Five-Characters Plan 
would permit any SRO that maintains a market for the listing and 
trading of plan securities to become a party to the plan.\68\ The 
Commission believes that SROs that have listing standards for plan 
securities, though they may not be actively listing such securities, 
and that maintain a market for the trading of plan securities would 
satisfy this requirement and would be permitted, though not required, 
to become parties to the plan. Joining the plan would enable such SROs 
to reserve symbols in anticipation of beginning a listings 
business.\69\ In addition, the Commission is requiring any SRO that 
chooses to list securities on its market or to designate securities for 
quoting on a quotation medium to join the approved plan.\70\
---------------------------------------------------------------------------

    \67\ The Commission notes that Nasdaq is no longer a facility of 
a national securities association and is now a national securities 
exchange. See supra note 26.
    \68\ See Section I(c) of the Five-Characters Plan.
    \69\ Parties to the plan are entitled to place up to 20 symbols 
on each of its perpetual reservation lists for one-, two-, or three-
character symbols and four- or five-character symbols, respectively. 
See infra notes 90 and 93-95 and accompanying text. The Commission 
notes that, for limited-time reservations, the plan requires a party 
to have a reasonable basis for using a limited-time reservation 
within a 24-month period. See infra notes 91-92 and accompanying 
text.
    \70\ See infra notes 192 and 197-198 and accompanying text.
---------------------------------------------------------------------------

    The Commission does not agree with commenters who believe that the 
use of one-, two-or three-character symbols by Nasdaq issuers will 
``blur and diminish the financial and other significant achievements 
commonly associated with NYSE listed companies'' \71\ or confuse 
investors who today purportedly identify such symbols as associated 
with NYSE. Many issuers not listed on NYSE utilize such symbols and 
have for a significant period of time and, therefore, any automatic 
association of such symbols with NYSE's listing standards or brand is 
mistaken.\72\ Therefore, the Commission finds that the provision on 
eligible parties in the proposed Five-Characters Plan is preferable and 
is necessary and appropriate in the public interest, for the protection 
of investors and the

[[Page 67224]]

maintenance of fair and orderly markets, and that it assures fair 
competition among exchange markets, consistent with Section 
11A(a)(1)(C)(ii) of the Act.\73\
---------------------------------------------------------------------------

    \71\ See Big Lots Letter.
    \72\ See supra note 64 and accompanying text.
    \73\ See 15 U.S.C. 78k-1(a)(1)(C)(ii).
    One commenter also argued that rights to ticker symbols should 
be allocated directly to issuers, rather than to the SROs. See 
Issuer Advisory Letter at 3. See also Angel Letter I at 3 and Angel 
Letter III at 4, arguing that issuers have stronger claims to 
symbols than their exchanges. The Commission believes, however, that 
developing a symbol reservation plan directly among the issuers 
would present significant challenges--including implementation and 
administrative challenges, and believes that continuing to allow 
listing markets to reserve and then allocate those symbols to 
qualified issuers is more workable and efficient.
    Because the Five-Characters Plan, as filed, listed the name of 
all SROs, including those that were not signatories to the plan, the 
Commission has deleted the names of SROs listed in Section I(a) of 
the Five-Characters Plan who are not signatories to the plan at this 
time.
---------------------------------------------------------------------------

    The Commission also believes that the Five-Characters Plan will 
further the purposes of the Act because it promotes competition among 
listing markets, including potential new listing markets. As described 
in further detail below, and unlike the Three-Characters Plan, the 
Five-Characters Plan provides each party to the plan with an equal 
allotment of perpetual and limited-time reservations.\74\ The Five-
Characters Plan also permits the portability of an issuer's symbol from 
one SRO to another, allowing competing listing venues to attract 
transferred listings without requiring issuers to change their ticker 
symbol.\75\ In addition, the Five-Characters Plan would allocate to any 
new party joining the plan a pro-rata portion of the initial 
development costs based upon the number of symbols initially reserved 
by such new party during its first twelve months as a party to the 
plan.\76\
---------------------------------------------------------------------------

    \74\ See discussion infra notes 77-104 and accompanying text.
    \75\ See discussion infra notes 105-117 and accompanying text.
    \76\ See discussion infra notes 118-124 and accompanying text.
---------------------------------------------------------------------------

3. Reservation and Use of Symbols
    Both proposed plans have provisions allowing parties to the plan to 
reserve symbols in perpetuity (``perpetual reservations'') and for a 
limited time (``limited-time reservations''). Specifically, both 
proposed plans provide that, within 30 days of Commission approval of 
the plan (unless such time is extended by the Policy Committee),\77\ 
parties may submit to the Processor \78\ requests for initial 
reservation of symbols.\79\ The proposed plans' differ as follows: (1) 
How reservation rights are allocated among the individual parties; (2) 
the number of symbols that may be reserved on the perpetual reservation 
and limited-time reservation lists, respectively; and (3) how limited-
time reservations may be secured. These differences and the reasons the 
Commission finds that the Five-Characters Plan's provisions on 
reservation rights, as modified herein, are appropriate in the public 
interest for the maintenance of fair and orderly markets and fair 
competition between the markets, consistent with the Section 
11A(a)(1)(C) of the Act,\80\ are discussed below.
---------------------------------------------------------------------------

    \77\ ISRA will be administered by a Policy Committee, which will 
consist of one voting member and one alternate voting member 
representing each party. See Section II(a) and (c) of the Five-
Characters Plan. See also Section II(a) and (c) of the Three-
Characters Plan, which is identical to the corresponding provision 
of the Five-Characters Plan.
    \78\ The Processor will be an independent third party to which 
ISRA will delegate the operation of the Symbol Reservation System. 
See Section III of the Five-Characters Plan. See also Section III of 
the Three-Characters Plan, which is identical to the Five-Characters 
Plan.
    \79\ The Commission is modifying the Five-Characters Plan's 
provision on the timing for the initial reservation process. See 
infra notes 77-104 and accompanying text for the discussion of this 
modification.
    \80\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

a. Allocation of Reservation Rights Among Parties
    The proposed Three-Characters Plan awards greater reservation 
rights to NYSE and Amex than to the other parties to the plan. 
Specifically, the proposed Three-Characters Plan would allow NYSE and 
Amex each to reserve 200 symbols as perpetual reservations and 1,500 
symbols as limited-time reservations, while other parties to the plan 
could only reserve 40 symbols as perpetual reservations and up to 500 
limited-time reservations.\81\ The Five-Characters Plan, on the other 
hand, awards equal reservation rights among all the parties--any 
eligible party to the plan could reserve 20 perpetual reservations and 
1,500 limited-time reservations of one-, two-, and three-character 
symbols and 20 perpetual reservations and 1,500 limited-time 
reservations of four- and five-character symbols.\82\ The Five-
Characters Plan also requires a party intending to include a symbol on 
its limited-time reservations lists to have a reasonable basis for 
using such symbol within 24 months.
---------------------------------------------------------------------------

    \81\ The proposed Three-Characters Plan, as amended, provided 
that NYSE Arca and CBOE each may have 500 limited-time reservations 
and that ISE may have 200 limited-time reservations. The plan would 
leave the precise number of limited-time reservations for other SROs 
to be decided when such SROs join the proposed plan.
    \82\ See Section IV(b)(1)(A) and (B) of the Five-Characters 
Plan. The Commission notes that the reservation lists do not apply 
to securities symbols already in use, but rather relate to unused 
ticker symbols.
---------------------------------------------------------------------------

    With respect to these provisions on reservation rights, the 
Commission finds that the Five-Characters Plan will further the 
purposes of the Act. The Five-Characters Plan allocates all reservation 
rights equally among all parties to the plan, consistent with fair 
competition principles. NYSE argued that the proposed Three-Characters 
Plan reservation provisions reflect the reality of its own likelihood 
to list a greater number of securities than the other markets.\83\ 
Nasdaq, however, disputed this assertion and stated that the allocation 
of reservations in this provision of the Three-Characters Plan is out 
of proportion to historic symbol usage.\84\ Nasdaq also argued that 
this provision would be discriminatory and that such discrimination is 
not compelled by market needs and is inconsistent with the equal 
regulation and pro-competition mandates of the Act. While the 
Commission recognizes that currently NYSE and Amex markets encompass 
the overwhelming majority of primary listings for issuers with one-, 
two-, and three-character symbols, the Commission does not believe that 
the dominance of any particular market should be enshrined in a 
national market system plan. Moreover, the Commission believes that the 
Five-Characters Plan's proposed allotments would permit active listing 
markets to reserve more than enough securities symbols for their 
listing business. The Five-Characters Plan, in contrast to the proposed 
Three-Characters Plan, would promote fair competition among the markets 
by providing all participants with the same number of reservations. 
Such equal reservation rights make it easier for an existing SRO or new 
entrant to compete on an equal basis with primary listing markets.
---------------------------------------------------------------------------

    \83\ See NYSE Letter at 6.
    \84\ See Nasdaq Letter II at 2.
---------------------------------------------------------------------------

    One commenter stated that OTC Bulletin Board (``OTCBB'')\85\ and 
Pink Sheet \86\ issuers should not have the same rights to use 
securities symbols as issuers listed on national securities 
exchanges.\87\ The commenter noted that,

[[Page 67225]]

in the past, if a Nasdaq-listed firm desired to use a ticker symbol 
that was in use by an OTCBB or Pink Sheet issuer, it could usually get 
such a symbol. In addition, the commenter noted that such issuers have 
not paid any listing fees to be traded on those markets and that many 
of them are shell companies with no operations or defunct companies. 
The commenter believed that only ``legitimate'' SEC registrants that 
meet the listing standards of the exchanges should be able to establish 
rights to ticker symbols.
---------------------------------------------------------------------------

    \85\ The OTCBB is a quotation service for over-the-counter 
equity securities run by FINRA, a national securities association.
    \86\ Pink Sheets is an interdealer electronic quotation system 
that displays quotes from market makers for many over-the-counter 
securities. To be quoted on the Pink Sheets, an issuer need only 
find one market maker to quote its shares, and Pink Sheets-traded 
issuers need not have audited financial statements. See http://
www.pinksheets.com.
    \87\ See Angel Letter I at 10.
---------------------------------------------------------------------------

    The Commission agrees and believes that significant investor 
confusion and harm could occur if such securities, which currently 
trade using four-or five-character symbols, were to begin trading with 
one-, two-, or three-character symbols. The Commission believes that it 
is important to distinguish between securities trading only on over-
the-counter trading venues and those listed on national securities 
exchanges. Exchange listing standards are approved by the Commission 
and must include corporate governance requirements that comply with 
Rule 10A-3 under the Act.\88\ Issuers traded on over-the-counter equity 
venues (including the OTCBB and Pink Sheets) are not subject to such 
listing standards. Therefore, such securities can be substantially 
different from those listed on a national securities exchange. The 
Commission does not believe any similar distinction exists among the 
national securities exchanges. Accordingly, the Commission believes 
that it is appropriate to limit securities not listed on a national 
securities exchange to using four-or five-character symbols, whereas it 
is not appropriate to similarly distinguish between exchange-listed 
securities. The Commission believes that issuers trading solely on the 
OTCBB, Pink Sheets, and any other over-the-counter venue should be 
limited to using four- and five-character symbols, as they do today, as 
any change from this current practice would unnecessarily confuse 
investors and could lead to investor harm. The Commission finds that it 
is necessary and appropriate in the public interest, and for the 
protection of investors and the maintenance of fair and orderly 
markets, that only issuers listed on a national securities exchange be 
allowed to use one-, two-, and three-character symbols.\89\ Therefore, 
the Commission is modifying the Five-Characters Plan to prohibit an SRO 
from reserving or using one-, two-, and three-character symbols for any 
issuer not listed on a national securities exchange.
---------------------------------------------------------------------------

    \88\ 17 CFR 240.10A-3.
    \89\ 17 CFR 242.608.
---------------------------------------------------------------------------

b. Number of Perpetual and Limited-Time Reservations
    The Three-Characters Plan contemplates allocating some SROs as many 
as 200 perpetual reservations. In contrast, the Five-Characters Plan 
would allow no more than 40 perpetual reservations for each party.\90\ 
The Commission believes that, because the Five-Characters Plan allows 
the overwhelming majority of unused symbols remain available for future 
use, exchanges would not be able to hold securities symbols in a manner 
that stifles or burdens competition. In this regard, the Commission 
believes that the perpetual reservation provisions of the Five-
Characters Plan are more favorable to new entrants. The Commission also 
believes that the Five-Characters Plan's allotment of 1,500 limited-
time reservations for one-, two-, and three-character symbols and 1,500 
limited-time reservations for four- and five-character symbols should 
adequately offset the low number of permitted perpetual reservations, 
and allow SROs to reserve a sufficient number of symbols in the short-
term for any pending use.
---------------------------------------------------------------------------

    \90\ The Five-Characters Plan would allow each party to place 20 
symbols on each of its perpetual reservation lists for one-, two-, 
or three-character symbols and four- or five-character symbols, 
respectively.
---------------------------------------------------------------------------

    Both proposed plans permit limited-time reservations for a period 
of 24 months, after which time the Processor would release such symbols 
to be available for reservation by parties on the waiting list for a 
given symbol or, in the absence of a waiting list, for general 
availability.\91\ The Five-Characters Plan requires a party to have a 
reasonable basis for using a limited-time reservation within such 24-
month period while the Three-Characters Plan has no such comparable 
requirement.\92\ Under the Five-Characters Plan, if a party does not 
use a limited-time reservation within the 24-month reservation period 
and no party reserves the symbol after the Processor releases it, then 
the original party would be able to subsequently reserve the symbol for 
an additional 24-month period, once again subject to the requirement 
that it has a reasonable basis for doing so. The Commission does not 
view the ``reasonable basis'' requirement in the Five-Characters Plan 
as mandating the usage of a symbol within 24 months, but believes that 
this requirement should help prevent the arbitrary reservation of 
symbols, particularly in an anti-competitive manner.
---------------------------------------------------------------------------

    \91\ See Sections IV(b)(1)(B) and IV(b)(5) of the proposed 
plans.
    \92\ Because ``reasonable basis'' was not defined in the Five-
Characters Plan, the Commission requested comment about it in the 
Symbology Notice. No commenters specifically responded to this 
request. The Commission believes that it is necessary and 
appropriate in the public interest to have the Policy Committee 
determine the appropriate interpretation and application of terms 
used in the plan, such as the term ``reasonable basis.'' To the 
extent that any of the parties to the plan are aggrieved by the 
determination of the Policy Committee in this regard, the Commission 
notes that it has the authority to hear appeals by such parties. See 
Rule 608(d), 17 CFR 242.608(d); see also supra notes 133-137 and 
accompanying text.
---------------------------------------------------------------------------

    One commenter argued that there should be no perpetual reservations 
because having a perpetual reservation would allow an exchange to 
exclude others from ever using a symbol.\93\ The Commission notes that, 
though they disagreed on the precise number of perpetual reservations 
each party should be able to reserve, the signatory SROs to both 
proposed plans agreed to the availability of perpetual 
reservations,\94\ and believes that perpetual reservations are not 
inconsistent with Rule 608 under the Act, which requires that the plan 
be 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. 
Nonetheless, the Commission believes that the number of such perpetual 
reservations should be kept to a minimum and believes that the Five-
Characters Plan's allocation of 40 perpetual reservations to each party 
is appropriate. The Commission acknowledges that new entrants that join 
the plan after the initial reservation process would have fewer options 
for selecting their perpetual reservations, as compared to the parties 
participating in the initial reservation process. But the Commission 
believes that, given the relatively low number of perpetual 
reservations allowed under the Five-Characters Plan (particularly as 
compared to the Three-Characters Plan), such new entrants would still 
have access to an adequate number of symbols and notes that they would 
also have the same right to have 40 perpetual reservations each. In 
addition, the Commission notes that, once an SRO assigns a symbol from 
its perpetual reservation list to an issuer, that symbol becomes 
portable to other listing markets if the issuer using the symbol were 
to transfer its listing to another

[[Page 67226]]

SRO.\95\ Because the Five-Characters Plan would limit each party to no 
more than 40 perpetual reservations and because an issuer using such a 
symbol could transfer its listing to another SRO if it chose to do so, 
the Commission finds that the Five-Characters Plan's provisions with 
respect to perpetual reservations are not anticompetitive and are 
appropriate in the public interest.
---------------------------------------------------------------------------

    \93\ See Angel Letter I at 6, 9 and Angel Letter II at 3, and 
Angel Letter III at 4.
    \94\ See Section IV(b)(1)(A) of the proposed plans.
    \95\ See Section IV(f) of the Five-Characters Plan.
---------------------------------------------------------------------------

    Finally, one commenter also stated that symbols should be allocated 
on a ``first-come, first-served'' basis with a ``use it or lose it'' 
feature.\96\ The Commission believes that the Five-Characters Plan's 
provisions relating to processing symbol requests for limited-time 
reservations incorporate this very principle.
---------------------------------------------------------------------------

    \96\ See Angel Letter I at 9 and Angel Letter III at 4.
---------------------------------------------------------------------------

c. Legacy Reservations
    Under both proposed plans, during the initial reservation process, 
a party in reserving a symbol that it claims was properly reserved 
under the current informal system prior to the effective date of the 
plan would have priority over other parties also reserving such 
symbol.\97\ Under the Five-Characters Plan, however, such party would 
have priority over other SROs to retain reservation of that symbol (a 
``legacy reservation'') only if the party represents that it has a 
reasonable basis \98\ to believe that it would utilize such symbol 
within the next six months. Moreover, such reservation would not count 
towards the party's perpetual reservations or limited-time 
reservations, but instead be reserved as a separate, additional legacy 
reservation.\99\ If the party does not use such symbol within the 
allotted six-month period, it would lose the reservation unless the 
party requests an extension for an additional six-month period. In 
requesting such an extension, the party would have to have a reasonable 
basis to believe that it would utilize such symbol within the 
additional six-month period. If the symbol has not been used within the 
additional six-month period, the symbol would be released by the 
Processor.\100\ The Three-Characters Plan also assigns priority for 
symbol reservations to parties that claim to have properly reserved 
such symbols under the current informal system prior to the effective 
date of the plan, but it does not place such reservations on a separate 
``legacy reservation'' list nor does it establish a separate process 
for using such symbols.\101\
---------------------------------------------------------------------------

    \97\ See Section IV(b)(2)(A) of the proposed plans.
    \98\ See supra note 92.
    \99\ See Section IV(b)(2)(A) of the proposed plans.
    \100\ See id.
    \101\ See Section IV(b)(2)(A) of the Three-Characters Plan.
---------------------------------------------------------------------------

    One commenter suggested establishing a 90-day remaining life to all 
symbols currently reserved by the exchanges, after which all symbol 
reservations by exchanges will cease to exist.\102\ Another commenter 
endorsed an approach similar to that in the Five-Characters Plan, 
proposing a transitional provision allowing for an exchange to assert a 
legacy reservation for up to 12 months for a pending use.\103\ The 
Commission finds that the legacy reservation provision in the Five-
Characters Plan is in the public interest, consistent with Section 
11A(a)(1)(C) of the Act, because it provides an appropriate transition 
period for symbol reservations held prior to the Commission's approval 
of the Five-Characters Plan.\104\
---------------------------------------------------------------------------

    \102\ See Issuer Advisory Letter at 3.
    \103\ See Sobha Letter.
    \104\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

4. Portability of Symbols
    Another key difference between the two proposed plans relates to 
the portability of symbols. In Amendment No. 1 to the proposed Three-
Characters Plan, that plan was amended to allow for the automatic 
portability of three-character symbols (i.e., allowing an issuer with a 
three-character ticker symbol to automatically continue to use that 
symbol upon transferring its listing to another SRO).\105\ Nonetheless, 
the proposed Three-Characters Plan maintains that one- and two-
character symbols would not be automatically portable if a listed 
issuer moves to another exchange. Under that proposed plan, the rights 
to a one-or two-character symbol of the issuer transferring to another 
exchange would remain with the former SRO unless the former SRO 
consents to the transfer of the symbol to the new SRO. The only 
exception would be, in the case of two-character symbols, if the new 
SRO demonstrates that it has a compelling business need that 
substantially outweighs the business needs of the former SRO. This 
determination would be made by the Processor and would be final. Under 
the proposed Three-Characters Plan, this exception would not apply to 
one-character symbols, which could not be transferred to a new SRO 
without the consent of the former SRO, even if the new SRO was able to 
demonstrate a compelling business need that substantially outweighed 
the business needs of the former SRO. In contrast, the Five-Characters 
Plan would provide the automatic portability of any symbol in the event 
that an issuer transfers its listing to another exchange (i.e., without 
requiring the consent of the former SRO).\106\
---------------------------------------------------------------------------

    \105\ Two commenters expressed concerns that an earlier proposed 
rule change of Nasdaq to allow the transfer of issuers with three-
character symbols to Nasdaq (SR-NASDAQ-2007-031) could circumvent 
efforts to develop a national market system plan for symbology. See 
RPM Letter and MDC Letter. In the Nasdaq Three-Character Portability 
Order, see supra note 29, the Commission addressed this concern and 
noted that its approval of that proposed rule change was independent 
of its consideration of the proposed NMS plans. As the Commission 
stated then, ``[p]articipants in any such plan would be required to 
comply with its requirements, which could necessitate changes to SRO 
rules.''  See Nasdaq Three-Character Portability Order at 38641.
    \106\ See Section IV(f) of the Five-Characters Plan.
---------------------------------------------------------------------------

    Many commenters have supported the portability provision of the 
Five-Characters Plan.\107\ Some commenters argued that the portability 
provision of the proposed Three-Characters Plan would create artificial 
restrictions on symbol use and portability that would not benefit 
listed companies or the investing public.\108\ One commenter stated 
that disallowing symbol portability is an anti-competitive and unfair 
practice.\109\ Another commenter argued that the inconvenience and 
transition costs involved with requiring a company to change its ticker 
symbol upon transferring from the NYSE to another exchange amount to an 
unfair restraint of trade.\110\ Two commenters also likened securities 
symbols to telephone numbers and argued that they should belong to the 
issuer and be fully portable.\111\
---------------------------------------------------------------------------

    \107\ See Omni Letter, Adams Letter, Amerigon Letter, Atkins 
Letter, United Stationers Letter, Glu Letter, ASA Letter, Electronic 
Arts Letter, Silicon Storage Letter, Silicon Graphics Letter, 
E*Trade Letter, Innospec Letter, SVB Letter, EFI Letter, Top Image 
Letter, and Double Eagle Letter, and Nasdaq Letter II at 3.
    \108\ See Amerigon Letter, United Stationers Letter, Glu Letter, 
Electronic Arts Letter, Silicon Storage Letter, Silicon Graphics 
Letter, Innospec Letter, E*Trade Letter, EFI Letter, Top Image 
Letter, Double Eagle Letter.
    \109\ See Issuer Advisory Letter at 2.
    \110\ See ASA Letter.
    \111\ See Spachman Letter, Angel Letter I at 5-6, Angel Letter 
II at 2, and Angel Letter III at 3 and 4.
---------------------------------------------------------------------------

    One commenter noted that issuers expend more effort and resources 
to associate a particular symbol with their company than anyone else, 
and therefore should be allowed to take their symbol with them when 
they move to another exchange.\112\ This commenter also stated that, 
over time, investors tend to associate a particular ticker symbol far 
more with a company than with a particular exchange and that, 
therefore, in terms of reducing investors' search and transaction 
costs, it makes

[[Page 67227]]

sense to award the rights to a particular ticker symbol to the issuer 
that has been using the ticker symbol, rather than the exchange where 
it originally listed.\113\ Furthermore, this commenter stated that 
changing an issuer's ticker symbol can result in confusion for 
investors and researchers and be the source of costly investment 
mistakes, noting that data vendors often do not catch a symbol change 
on time.\114\ One issuer cited its own experience with transferring its 
listing from NYSE to Nasdaq and consequently changing its symbol; 
though it ultimately decided to switch listing venues, the issuer 
stated the need to change its ticker symbol was a negative factor 
because of the time and resources it had to expend to make sure its 
investors were aware of the symbol change.\115\ Finally, one commenter 
also noted that allowing symbol portability would strengthen 
competition between markets.\116\
---------------------------------------------------------------------------

    \112\ See Angel Letter I at 4.
    \113\ Id.
    \114\ See Angel Letter I at 5. See also Nasdaq Letter II at 3.
    \115\ See E*Trade Letter. See also Nasdaq Letter II at 3.
    \116\ See Angel Letter II at 2.
---------------------------------------------------------------------------

    The Commission finds that allowing the automatic portability of a 
symbol in the event that an issuer transfers its listing to another 
exchange will further the purposes of the Act and should reduce 
investor confusion by allowing the symbol already associated with the 
issuer to continue to be used by the issuer on the new exchange. The 
Commission also finds that allowing automatic symbol portability would 
remove a burden on competition among markets not necessary or 
appropriate in furtherance of the purposes of the Act by making it 
easier for listed issuers to transfer their listings to another 
exchange, thereby enhancing competition among exchanges in the business 
of providing a listing venue. Eliminating the costs and administrative 
efforts associated with acquiring a new symbol for transferred listings 
should allow listed issuers to make decisions about listing based on 
factors such as listing costs and the quality of markets. The 
Commission believes that automatic symbol portability is preferable to 
allowing an issuer's former listing exchange to retain the rights to a 
symbol once a listed issuer has transferred to another market, 
particularly as the former market likely would not reuse the symbol in 
the near term without causing undue investor confusion. Therefore, the 
Commission finds that the automatic symbol portability provision in the 
Five-Characters Plan is in the public interest, appropriate for the 
protection of investors and the maintenance of fair and orderly 
markets, and assures fair competition among exchange markets, 
consistent with the Section 11A(a)(1)(C) of the Act.\117\
---------------------------------------------------------------------------

    \117\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

5. Allocation of Plan Costs
    The two proposed plans also differ with respect to the allocation 
of the initial development costs and ongoing costs of the plan. The 
proposed Three-Characters Plan would have all initial and ongoing costs 
shared equally among all the parties.
    The Five-Characters Plan provides that the parties would share the 
initial development costs pro-rata based on the number of symbols 
initially reserved by each party. Any new party that joins the plan 
would also be responsible for a pro-rata portion of the initial 
development costs based upon the number of symbols initially reserved 
by such new party during the first twelve months of the new party's 
membership in the plan.\118\ The Five-Characters Plan also provides 
that the continuing costs and expenses of ISRA would be shared among 
the parties pro-rata based on the number of additional symbols reserved 
in each calendar year, estimated quarterly.\119\ In addition, under the 
Five-Characters Plan, the Policy Committee \120\ may develop 
alternative cost-allocation methodologies for special development 
projects outside the initial development period. One commenter 
expressed support for this provision in the Five-Characters Plan as it 
would require exchanges to bear the costs of the system only to the 
extent they reserve and use symbols.\121\
---------------------------------------------------------------------------

    \118\ See Section V(a) of the Five-Characters Plan.
    \119\ See Section V(b) of the Five-Characters Plan.
    \120\ See infra notes 125-137 and accompanying text.
    \121\ See Adams Letter.
---------------------------------------------------------------------------

    The Commission finds that the Five-Characters Plan's provision for 
the allocation of costs will further the purposes of the Act in that it 
establishes an equitable means of allocating costs among the plan 
parties.\122\ The SROs supportive of the Three-Characters Plan 
anticipate that certain SROs, such as NYSE and Amex, would likely use 
the reservation system more than other SROs.\123\ It is the proposed 
Five-Characters Plan, however, that recognized this likelihood by 
allocating costs based on an SRO's use of the reservation system. 
Moreover, the parties' usage of the system will likely vary as markets 
compete for listings. Under the Five-Characters Plan, the cost 
allocation will similarly vary with any changes in use of the 
reservations. Therefore, the Commission finds that the cost allocation 
provision of the Five-Characters Plan is in the public interest, 
appropriate for the protection of investors and the maintenance of fair 
and orderly markets, and assures fair competition among exchange 
markets, consistent with Section 11A(a)(1)(C) of the Act.\124\
---------------------------------------------------------------------------

    \122\ One commenter argued, based on its belief that the issuers 
have rights to the symbols, that issuers should pay for the plan in 
accordance with the Regulation NMS market data revenue formula. See 
Angel Letter II at 3. The Commission notes, however, that the 
listing markets charge initial and ongoing listing fees to issuers 
listed on their markets, and therefore issuers are likely to pay 
indirectly.
    \123\ This expectation is the basis for the proposed Three-
Characters Plan providing more reservations to NYSE and Amex than 
the other SROs. See NYSE Letter at 6.
    \124\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

B. Similar Provisions Among the Proposed Plans

    Other than the areas of substantive differences between the 
proposed plans discussed above, the remaining provisions of the Five-
Characters Plan are substantially similar or identical to parallel 
provisions in the proposed Three-Characters Plan. The Commission 
believes that such similarities evidence a broad consensus among the 
SROs as to the overall framework and most of the main provisions of the 
Five-Characters Plan, a result of the collaboration by and negotiations 
between the SROs following the issuance of the February 2005 Letters to 
discuss the terms of an appropriate national market system plan for the 
reservation and allocation of securities symbols. Therefore, the 
Commission believes that these aspects of the Five-Characters Plan 
represent a fair and workable symbol reservation system for the 
prospective parties to the plan.
    The following section discusses the remaining provisions of the 
Five-Characters Plan, which are substantially similar or identical to 
provisions in the proposed Three-Characters Plan.
1. Administration of ISRA
    The Five-Characters Plan would establish a body composed of the 
signatory SROs called the Intermarket Symbols Reservation 
Authority.\125\ A Policy Committee, consisting of representatives of 
each of the signatory SROs, would administer the ISRA and, unless 
expressly provided otherwise in the plan, would make all policy 
decisions on behalf of the ISRA in furtherance of the functions and 
objectives of the ISRA under the Act and the plan. Specifically, the 
Policy

[[Page 67228]]

Committee would: (1) Oversee the operation of the Symbol Reservation 
System; (2) make all determinations pertaining to contracts with 
parties to the plan and persons who provide goods or services to the 
ISRA; and (3) determine all other questions pertaining to the planning, 
developing, and operating of the ISRA, including those pertaining to 
budgetary or financial matters.\126\
---------------------------------------------------------------------------

    \125\ See Section II(a) of the Five-Characters Plan.
    \126\ See Section II(b) of the Five-Characters Plan.
---------------------------------------------------------------------------

    One voting member and one alternate voting member representing each 
party would compose the Policy Committee.\127\ Each party would have 
one vote on all matters voted upon by the Policy Committee and actions 
of the ISRA under each plan would be authorized by a majority vote of 
the Policy Committee members, subject to Commission approval when 
required by applicable securities law.\128\ Authorized actions under 
the plan would be binding upon all the parties. However, an aggrieved 
party may present contrary views to any regulatory body or in any other 
appropriate forum.\129\ A meeting of the Policy Committee would be held 
at least annually and other meetings would be held as determined by the 
Policy Committee, subject to the notice provisions for regular and 
special meetings and the organization of the meetings.\130\
---------------------------------------------------------------------------

    \127\ See Section II(c) of the Five-Characters Plan.
    \128\ See Section II(d) of the Five-Characters Plan.
    \129\ Id.
    \130\ See Section II(e) of the Five-Characters Plan.
---------------------------------------------------------------------------

    The Commission finds that the provisions of the Five-Characters 
Plan relating to the establishment of the ISRA and the administration 
of the ISRA by the Policy Committee will further the purposes of the 
Act and should assure fair competition between exchange markets, 
consistent with Section 11A(a)(1)(C) of the Act.\131\ The Commission 
believes that, because the Policy Committee is composed of one voting 
member representing each party, that each party would be limited in its 
ability to act in an anti-competitive manner.\132\
---------------------------------------------------------------------------

    \131\ 15 U.S.C. 78k-1(a)(1)(C).
    \132\ See Section II(c) of the Five-Characters Plan.
---------------------------------------------------------------------------

    Two commenters have recommended the adoption of a formal dispute 
resolution mechanism for the plan.\133\ The Commission notes that 
Section 11A of the Act and Rule 608 require national market system 
plans to describe, to the extent applicable, the method by which 
disputes in connection with the operation of the plan will be 
resolved.\134\ The Five-Characters Plan specifies a dispute resolution 
mechanism with respect to the initial reservation of securities 
symbols, where disagreements are most likely to arise.\135\ With regard 
to the operation of the plan following the initial reservation period, 
the Commission believes that the likelihood of disputes among the 
parties arising under the plan is minimal because the plan specifies 
the methods relating to submitting reservation requests, requesting 
releases of symbols, the operation of waiting lists, the reuse of 
symbols, and all other aspects of reserving and allocating 
symbols.\136\ To the extent that disputes nonetheless arise and the 
parties are not able to resolve them, the Commission notes that under 
Rule 608(d) of the Act, the Commission has broad discretion to review, 
either on its own motion or upon the application of any person 
aggrieved thereby, actions taken (or failures to act) by any person in 
connection with an effective national market system plan.\137\ 
Therefore, the Commission finds that the Five-Characters Plan's 
provision on dispute resolution is appropriate in the public interest.
---------------------------------------------------------------------------

    \133\ See Angel Letter I at 11. See also Issuer Advisory Letter 
at 3.
    \134\ See 17 CFR 242.608(a)(5)(iv).
    \135\ See Section IV(b)(2) of the Five-Characters Plan.
    \136\ See Sections IV(b)(6), IV(c), and IV(d), respectfully, of 
the Five-Characters Plan.
    \137\ See Rule 608(d)(1).
---------------------------------------------------------------------------

2. The Processor for the Symbol Reservation System
    Under the Five-Characters Plan, the ISRA would delegate the 
operation of the Symbol Reservation System to an independent third 
party (the ``Processor'') and would enter into contracts with the 
Processor relating to the operation of the Symbol Reservation 
System.\138\ The Processor would receive reservation requests from the 
parties and reserve and allocate symbols among the parties in 
accordance with the terms of the plan.\139\ To this end, the Processor 
would create and maintain a symbol reservation database.\140\ Parties 
to the Five-Characters Plan would determine the method and frequency of 
the evaluation of the Processor at a later time.
---------------------------------------------------------------------------

    \138\ See Section III of the Five-Characters Plan.
    \139\ One commenter suggested that the Commission could assign 
the rights to unused ticker symbols directly to issuers by auction. 
See Angel Letter III at 4-5. The Commission believes that the 
proposed allocation of symbol reservation rights using the Processor 
under the Five-Characters Plan is in furtherance of the purposes of 
the Act.
    \140\ See infra notes 175-178 and accompanying text for further 
discussion of the plan provisions on the database.
---------------------------------------------------------------------------

    The Commission finds that provisions of the Five-Characters Plan 
relating to the Processor promote the maintenance of fair and orderly 
markets by ensuring that a symbol is used for only one security. The 
capacity and capability of the Processor to completely maintain 
processes and systems for the reservation and allocation of symbols 
under the plan is integral to this plan's effective implementation. 
Accordingly, the Commission expects the parties to the Five-Characters 
Plan to regularly evaluate the Processor's performance.
3. Symbol Reservation System
    The Five-Characters Plan provides that, within 30 days of the 
Commission's approval of the Five-Characters Plan (unless such time is 
extended by the Policy Committee), a participant in the plan may submit 
to the Processor requests for the initial reservation of symbols.\141\ 
A party may reserve symbols for: (i) The listing of common stock or any 
other security, including options; (ii) with respect to four- and five-
character symbols,\142\ the trading of any over-the-counter security; 
(iii) the dissemination of a securities index or other index 
information; or (iv) any other purpose authorized by a majority vote.
---------------------------------------------------------------------------

    \141\ See Section IV(b)(1) of the Five-Characters Plan.
    \142\ See discussion supra notes 85-89 and accompanying text 
relating to limiting the use of securities symbols by issuers traded 
other than on national securities exchanges to four- and five-
character symbols.
---------------------------------------------------------------------------

    To provide sufficient time for SROs to join the plan and for the 
plan participants and the Processor to implement the Symbol Reservation 
System, the Commission is modifying Section IV(b)(1) of the plan to 
provide that the initial symbol reservation process will begin 60 days 
after the Commission's approval of the plan and will ensue for a 30-day 
period.\143\
---------------------------------------------------------------------------

    \143\ To conform to the Commission's modification of the initial 
reservation process, the Commission is also modifying Section 
IV(c)(1) of the Five-Characters Plan to clarify that the waiting 
list procedure applies during the initial reservation period rather 
than within 30 days of the effective date of the plan.
---------------------------------------------------------------------------

a. Perpetual and Limited-Time Reservations
    As noted earlier, under the Five-Characters Plan, a party may 
reserve a limited number of symbols in perpetuity.\144\ There would be 
two perpetual reservation lists for each party--one list for one-, two-
, and three-character symbols and one list for four- and five-character 
symbols. Each party could reserve up to 20 one-, two-, or three-
character symbols as perpetual reservations, and up to 20 four- or 
five-

[[Page 67229]]

character symbols as perpetual reservations.
---------------------------------------------------------------------------

    \144\ See Section IV(b)(1)(A) of the Five-Characters Plan.
---------------------------------------------------------------------------

    A party that requests perpetual reservations for more symbols than 
permitted would be required to place its symbols requests in priority 
ranking. A party could not add symbols to its perpetual reservation 
list after the initial reservation process, except when reserving a 
symbol for reuse.\145\
---------------------------------------------------------------------------

    \145\ See infra notes 166-174 and accompanying text for 
discussion of the plan provision on reusing a symbol.
---------------------------------------------------------------------------

    Symbols could also be reserved for a limited-time period of 24 
months.\146\ Each party would have two limited-time reservation lists--
one list for one-, two-, and three-character symbols and one list for 
four- and five-character symbols. Each party could reserve up to 1,500 
symbols under the one-, two-, or three-character limited-time 
reservations list and up to 1,500 symbols under the four-or five-
character limited-time reservations list. A party may not make a 
limited-time reservation with respect to a particular symbol unless the 
party has a reasonable basis to utilize the symbol within the next 24 
months.
---------------------------------------------------------------------------

    \146\ See Section IV(b)(1)(B) of the Five-Characters Plan.
---------------------------------------------------------------------------

    As with perpetual reservation requests, a party that requests 
limited-time reservations for more symbols than permitted would be 
required to place its symbols requests in priority ranking.
b. Processing Reservation Requests
    If there is only one party that claims a legacy reservation, such 
party would have priority over other SROs to retain its reservation of 
that symbol.\147\ If more than one party lays claim to a single legacy 
reservation, the Five-Characters Plan provides a process for resolving 
such claims.\148\ This process is as follows: First, the Processor 
would notify all such parties of the conflicting claims. Then the 
parties would have five business days to reach a mutually acceptable 
agreement as to which party would be permitted to reserve the symbol. 
In the absence of an agreement, the Policy Committee would resolve the 
issue by a majority vote of the parties not claiming the symbol. Where 
there is no agreement but the Policy Committee is able to determine 
which party has the earliest proper claim to such symbol, the plan 
would require it to resolve the disagreement in favor of such party. In 
the event of a tie vote, the Policy Committee would establish a random 
order of the parties to determine which party may reserve the 
symbol.\149\ The Commission believes that the plan provisions with 
respect to resolving legacy reservation claims are consistent with Rule 
608 under the Act which requires the plan be 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.
---------------------------------------------------------------------------

    \147\ See supra notes 97-104 and accompanying text for a 
discussion of the legacy reservation process.
    \148\ See Section IV(b)(2)(B) of the Five-Characters Plan.
    \149\ See id. Because the ``random order'' process was not 
described in the proposed plans, the Commission requested comment 
about it in the Symbology Notice. No commenters specifically 
responded to this request. The Commission believes that it is 
necessary and appropriate in the public interest to have the Policy 
Committee determine the appropriate interpretation and application 
of the plan provisions relating to the ``random order'' process. 
However, the Commission believes that the Policy Committee must 
establish a random order process that will not be susceptible to 
gaming by parties to the plan. For example, the Policy Committee 
should not use a system which would allow SROs to know ahead of time 
if they are the party next in line to reserve a given symbol. To the 
extent that any of the parties to the plan are aggrieved by the 
determination of the Policy Committee in this regard, the Commission 
notes that it has the authority to hear appeals by such parties. See 
Rule 608(d), 17 CFR 242.608(d); see also supra notes 133-137 and 
accompanying text.
---------------------------------------------------------------------------

    For the reservation of symbols other than legacy reservations, if 
only one party seeks to reserve a symbol, then the Processor would 
reserve such symbol for that party.\150\ If multiple parties seek to 
reserve a symbol, the Processor would reserve the symbol based on a 
random ordering established by the Policy Committee.\151\ If a symbol 
is not available for reservation, the Processor would place the 
requesting party on a wait list.\152\ The Processor would process a 
party's symbol reservation requests by first reserving symbols up to 
the party's limit for its perpetual reservations list and then 
reserving the remaining requested symbols up to the limit for its 
limited-time reservations.\153\
---------------------------------------------------------------------------

    \150\ See Section IV(b)(2)(C) of the Five-Characters Plan.
    \151\ See Section IV(b)(2)(D) of the Five-Characters Plan. See 
also supra note 149.
    \152\ See Section IV(b)(2)(E) of the Five-Characters Plan. See 
also infra notes 162-165 and accompanying text for a discussion on 
the waiting list plan provision.
    \153\ See Section IV(b)(2)(F) of the Five-Characters Plan.
---------------------------------------------------------------------------

    After the initial reservation process, if a party submits to the 
Processor a request for a limited-time reservation and the symbol is 
available, the Processor would reserve such symbol, provided that the 
party has not already reached its maximum number of allowed limited-
time reservations.\154\ If a symbol requested is not available, the 
Processor would place the requesting party on the waiting list for such 
symbol.\155\
---------------------------------------------------------------------------

    \154\ See Section IV(b)(3)(A) of the Five-Characters Plan.
    \155\ See Section IV(b)(3)(B) of the Five-Characters Plan.
---------------------------------------------------------------------------

c. Non-Use or Release of Symbols Within Time Period
    The Processor would release any limited-time reservation symbols 
not used within the 24-month time period.\156\ A party could also 
voluntarily release a reserved symbol. In either case, upon the release 
of a symbol, the Processor would notify the parties on the waiting 
list, if any, of the symbol's availability. If there is no waiting list 
or if no party on the waiting list elects to reserve such symbol, the 
Processor would notify all parties to the plan of the availability of 
the symbol. Then, if more than one party requests the reservation of 
such symbol within two business days of the notice, the Processor would 
assign the symbol to one party and place the other parties on the 
waiting list pursuant to a random order of priority established by the 
Policy Committee.\157\
---------------------------------------------------------------------------

    \156\ See Section IV(b)(5) of the Five-Characters Plan.
    \157\ See supra note 149.
---------------------------------------------------------------------------

d. Request for Release of a Symbol
    If a party has an immediate need to use a symbol that another party 
has reserved, the requesting party would ask the party that reserved 
the symbol and any other parties on the waiting list whether such 
parties would be willing to release the reserved symbol.\158\ If the 
parties do not agree to release the symbol, the requesting party would 
not obtain the reserved symbol. If the parties do agree to release the 
symbol, the requesting party could include such symbol as one of its 
limited-time reservations. If the requesting party does not use a 
released symbol within the 24-month period, absent the consent of all 
parties initially required to be contacted, the reservation and waiting 
list priority in effect when the requesting party first made its 
request for the release of the symbol would again be in effect.\159\
---------------------------------------------------------------------------

    \158\ See Section IV(b)(6) of the Five-Characters Plan.
    \159\ See infra notes 160-161 and accompanying text for a 
discussion of ``redesignation'' relating to requests for release of 
symbols under Section IV(b)(6) of the Five-Characters Plan, which 
the Commission is modifying.
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e. Reserving Symbols after Reaching Maximum Number of Permitted 
Reservations
    Paragraph (5) of Section IV(b) of the proposed plans states that a 
party may ``redesignate'' a security in certain

[[Page 67230]]

situations. Specifically, following the initial reservation process, if 
a party wishes to add a symbol to its limited-time reservations and 
such party already has the maximum number of reservations permitted, 
such party ``must voluntarily release or redesignate a symbol, as 
described in subparagraph (3)(A) above, before it can reserve the 
assigned symbol.'' \160\ Similarly, if a party has an immediate need to 
use a symbol that another party has reserved, the requesting party 
would ask the party that reserved the symbol, and any other parties on 
the waiting list, whether such parties would be willing to release the 
reserved symbol.\161\ Then, under paragraph (6) of Section IV(b) of the 
Five-Characters Plan, if the requesting party is already at the maximum 
number of limited-time reservations, the party could either surrender 
or redesignate a symbol as described in subparagraph (3)(A) of the 
Plan, before it can reserve the assigned symbol.
---------------------------------------------------------------------------

    \160\ See Section IV(b)(5) of the proposed plans.
    \161\ See Section IV(b)(6) of the Five-Characters Plan.
---------------------------------------------------------------------------

    The Commission requested comment as to the meaning of 
``redesignating'' a symbol when a party is at the maximum number of 
limited-time reservations, but did not receive any comments. Because 
subparagraph (3)(A) of Section IV(b) of either plan does not discuss 
redesignating symbols, the Commission finds it is necessary and 
appropriate in the public interest to remove the reference to 
``redesignate'' in paragraphs (5) and (6) of Section IV(b) of the Five-
Characters Plan. Thus, if a requesting party is already at the maximum 
number of limited-time reservations when reserving a requested symbol, 
such party would have to surrender another symbol in order to reserve 
the requested symbol.
f. Waiting Lists
    When one or more parties request to reserve a symbol that another 
party has reserved, the Processor would place such parties on the 
waiting list for that symbol.\162\ The waiting list would be based on 
time priority--that is, the earliest request would have precedence. 
However, as proposed, the Five-Characters Plans states that, if more 
than one party seeks to use a symbol already in use within either 30 
days of the effective date of the plan or two business days of notice 
of a symbol's availability, the Policy Committee would establish a 
random order of such parties to determine priority on the waiting 
list.\163\
---------------------------------------------------------------------------

    \162\ See Section IV(c)(1) of the Five-Characters Plan.
    \163\ To ensure consistency with the Commission's modification 
of the initial reservation process timeline (see discussion supra 
notes 141-143 and accompanying text), the Commission is also 
modifying Section IV(c)(1) of the Five-Characters Plan to clarify 
that the waiting list procedure applies during the initial 
reservation process.
---------------------------------------------------------------------------

    When a symbol becomes available, the Processor would notify the 
party with priority on the waiting list.\164\ Such party would then 
have two business days to reserve that symbol; otherwise, the Processor 
would repeat the process as necessary with all parties on the waiting 
list, in order of priority. The maximum number of symbols for which a 
party may be on the waiting list at any time would be 100 symbols.\165\
---------------------------------------------------------------------------

    \164\ See Section IV(c)(2) of the Five-Characters Plan.
    \165\ See Section IV(c)(3) of the Five-Characters Plan.
---------------------------------------------------------------------------

g. Reuse of a Symbol and Portability of Symbols in Use
    If a party ceases to use a symbol, such party automatically 
reserves that symbol, notwithstanding any other limits on the number of 
reserved symbols under the plan.\166\
---------------------------------------------------------------------------

    \166\ See Section IV(d) of the Five-Characters Plan.
---------------------------------------------------------------------------

    However, there is an exception to this automatic reservation right 
when an issuer transfers its listing from one SRO to another. In this 
case, the SRO to which a listing is transferred would have the rights 
to that issuer's symbol.\167\ One commenter, FINRA, noted that Section 
(IV)(f) of the Five-Characters Plan allows the portability of a symbol 
only when an issuer ``lists'' on a new SRO.\168\ FINRA noted that this 
language may create some ambiguity in the case when a security delists 
from an exchange and is traded on an SRO's OTC equity market. A strict 
interpretation of the text of Section (IV)(f) of the Five-Characters, 
as proposed, could lead to the conclusion that an issuer that delists 
from an exchange and trades on an OTC market would lose its rights to 
its original symbol. FINRA asked that this provision of the Five-
Characters Plan be amended to explicitly provide that the portability 
rights for an issuer transferring its listing to another exchange also 
be extended to issuers that delist from an exchange and trade on an OTC 
equity market.
---------------------------------------------------------------------------

    \167\ See Section IV(f) of the Five-Characters Plan.
    \168\ See FINRA Letter at 2.
---------------------------------------------------------------------------

    NYSE, however, argued that securities have always lost their listed 
symbols after delisting for failure to meet continue listing standards, 
and that this practice is desirable because it alerts investors as to 
the failure of the issuer to meet those standards.\169\ NYSE noted 
that, otherwise, investors might mistake the delisted security for a 
security that continues to meet exchange listing standards. The 
Commission agrees with NYSE's comments with respect to the potential 
for investor confusion and hereby clarifies that issuers that delist 
from an exchange and trade on an OTC equity market shall not have 
portability rights for their original symbol.\170\ In such cases, 
Section IV(d) of the Five-Characters Plan would apply and the SRO from 
which the issuer delisted would automatically have such symbol 
reserved. At the same time, the Commission believes that the near-term 
reuse of a delisted security's original symbol while the delisted 
security trades on an OTC equity market could cause investor 
confusion.\171\ A symbol could not be reused by a party to identify a 
new security unless the party reasonably determines that such use would 
not cause investor confusion.\172\
---------------------------------------------------------------------------

    \169\ See NYSE Letter at 7.
    \170\ As discussed above, see supra notes 85-89 and accompanying 
text, securities that trade solely over-the-counter, which are not 
subject to listing standards approved by the Commission, should be 
clearly distinguished from exchange-listed securities. The 
Commission believes that a change to an issuer's symbol following 
delisting is desirable to inform investors of the change in status 
of the issuer. Therefore, the Commission believes that it is 
appropriate to prohibit symbol portability rights for delisted 
issuers that trade on an OTC equity market with security symbols of 
any length, including symbols with four- or five-characters.
    \171\ See Section IV(d) of the Five-Characters Plan (providing 
that a symbol may not be reused by a party to the plan to identify a 
new security, other than the security that has been trading under 
such symbol, unless the party reasonably determines that such use 
would not cause investor confusion).
    \172\ See Section IV(d) of the Five-Characters Plan. One 
commenter stated that symbols should not be reassigned until six 
months after an issuer ceases to use such symbol in order to avoid 
customer confusion. See Angel Letter I at 9. The Commission notes 
that this plan provision, without providing a specific timeframe, 
prohibits an exchange from assigning a reused symbol at any time if 
doing so would cause investor confusion. The Commission does not 
believe that specifying a six-month timeframe to be appropriate as 
such a time period may, in some cases, be too short and the reuse of 
a security symbol in such cases may still cause investor confusion. 
Although the passage of time is one key factor, other factors may 
need to be considered as well. For example, whether the original 
issuer's securities are traded over-the-counter or have ceased 
trading altogether is another factor in evaluating the potential for 
confusion with regards to the original listing symbol.
---------------------------------------------------------------------------

    A symbol being reused pursuant to this provision could be reserved 
as a perpetual reservation if the party has not yet reserved the full 
number of perpetual reservations available to it.\173\ Otherwise, such 
symbol would be

[[Page 67231]]

reserved as a limited-time reservation and the additional symbol could 
exceed the limit of the maximum number of limited-time reservations 
permitted to a party under the plan.
---------------------------------------------------------------------------

    \173\ Section IV(d) of the Five-Characters Plan also provides 
that a party could move a symbol from its perpetual reservations 
list to its limited-time reservations list in order to place the 
symbol being reused on its perpetual reservations list.
---------------------------------------------------------------------------

    The Commission finds that the foregoing symbol reservation system 
provisions of the Five-Characters Plan will further the purposes of the 
Act and that, in particular, they should maintain fair and orderly 
markets to assure fair competition between exchange markets, consistent 
with Section 11A(a)(1)(C) of the Act.\174\
---------------------------------------------------------------------------

    \174\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

4. Database
    Under the Five-Characters Plan, the Processor would create and 
maintain a symbol reservation database.\175\ The database would show 
all symbols currently in use and the party using such symbols.\176\ A 
party would be required to notify the Processor when the party begins 
using a reserved symbol. In addition, the database would show all 
symbols reserved on the perpetual reservations and limited-time 
reservations lists, including the reserving party and the expiration 
date for limited-time reservations.\177\ The database would also show 
the waiting list and the priority order of the waiting list for each 
symbol.\178\
---------------------------------------------------------------------------

    \175\ See Section IV(e) of the Five-Characters Plan. One 
commenter has expressed an interest in acting as the Processor for 
the adopted plan. See SFB Letter. Another commenter suggested that 
FINRA be the Processor. See Issuer Advisory Letter at 3.
    \176\ See Section IV(e)(1) of the Five-Characters Plan.
    \177\ See Section IV(e)(2) of the Five-Characters Plan.
    \178\ See Section IV(e)(3) of the Five-Characters Plan.
---------------------------------------------------------------------------

    The Commission finds that the provisions of the Five-Characters 
Plan relating to the symbols database will further the purposes of the 
Act because the database of symbols is essential to ensure that a 
symbol is used to identify only one security and therefore will help in 
the maintenance of fair and orderly markets.
5. Confidentiality
    The Processor would maintain all information received from the 
parties in strictest confidence and the only information that the 
Processor would make available to the parties is the symbol reservation 
database.\179\ The Processor would not make the symbol reservation 
database available to any person except the Commission or the parties, 
unless otherwise required by applicable law.
---------------------------------------------------------------------------

    \179\ See Section VI of the Five-Characters Plan.
---------------------------------------------------------------------------

    One commenter questioned the need for confidentiality of the 
information in this database, arguing that issuers may want to know if 
a symbol is available to reserve it in advance.\180\ The Commission 
does not believe that the Act imposes any requirement to make this 
information available publicly.\181\ Therefore, the Commission finds 
that the confidentiality provisions of the Five-Characters Plan are 
appropriate in the public interest.
---------------------------------------------------------------------------

    \180\ See Angel Letter II at 5.
    \181\ The Commission also notes that the confidentiality 
requirement under the plan applies only to the Processor, and that 
nothing under the plan requires confidentiality on the part of the 
parties. Therefore, to the extent an issuer wants to know if a 
symbol is available, it could request such information from one of 
the parties.
---------------------------------------------------------------------------

6. Term of Plan Withdrawal--Non-Transferability of Rights under the 
Plan
    A party wishing to withdraw from the plan would be required to 
provide at least six months prior written notice to the other 
parties.\182\ The withdrawing party would remain liable for its 
proportionate share of costs and expenses during the time it was a 
party to the plan, but would have no further obligations after the 
withdrawal.
---------------------------------------------------------------------------

    \182\ See Section VII of the Five-Characters Plan.
---------------------------------------------------------------------------

    In addition, an SRO would cease to be a party to the plan when it 
ceases to maintain a facility for the quoting and trade reporting of 
securities transactions or ceases to use symbols subject to the plan, 
except upon the agreement of the remaining parties.\183\ To be approved 
as a continuing party, the plan would require a majority vote of the 
remaining parties.
---------------------------------------------------------------------------

    \183\ See Section I(d) of the Five-Characters Plan.
---------------------------------------------------------------------------

    The right of a party to participate in the Symbol Reservation 
System under the plan is not transferable without the consent of the 
other parties.\184\ However, if a party is subject to a merger, 
combination, or other reorganization or the sale of all or 
substantially all of its assets, including its registration as an SRO, 
the surviving entity would automatically become subject to the plan and 
could use the Symbol Reservation System.
---------------------------------------------------------------------------

    \184\ See Section VII of the Five-Characters Plan.
---------------------------------------------------------------------------

    The Commission finds that the provisions of the Five-Characters 
Plan relating to a party withdrawing from the plan will further the 
purposes of the Act because, by specifying a party's terms of 
withdrawal, the plan helps to ensure a fair and orderly market.
7. Amendments to the Plan
    The plan may be amended from time to time when authorized by the 
affirmative vote of all the parties, subject to any required approval 
of the Commission.\185\ One commenter questioned the efficacy of 
requiring unanimous approval for plan changes.\186\ Although the 
Commission agrees that the plan's unanimity provision with respect to 
amendments may, in some cases, not be the most efficient method, the 
Commission notes that the signatory SROs to both proposed plans agreed 
to this required voting methodology and the Commission is reluctant to 
require a different voting methodology for plan amendments at this 
time.
---------------------------------------------------------------------------

    \185\ See Section VIII of the Five-Characters Plan.
    \186\ See Angel Letter II at 4. The Commission notes, however, 
that other national market system plans have similar provisions 
(see, e.g., the Options Linkage Plan at http://
www.optionsclearing.com/initiatives/ola/ola.jsp).
---------------------------------------------------------------------------

    The Commission finds that the provision of the Five-Characters Plan 
relating to amendments to the plan is in furtherance of the purposes of 
the Act in that it specifies the method by which the plan may be 
amended. The Commission will monitor this process to determine whether 
the unanimity provision is used for anti-competitive purposes or for 
any other purpose not consistent with the Act. The Commission notes 
that SROs proposing an amendment to a national market system plan must 
file such amendment with the Commission pursuant to Rule 608 under the 
Act.\187\ The Commission also notes that it has the authority to amend 
any effective national market system plan under Rule 608 under the 
Act.\188\
---------------------------------------------------------------------------

    \187\ See 17 CFR 242.608(a).
    \188\ See 17 CFR 242.608(a)(2) and (b)(2).
---------------------------------------------------------------------------

8. Development and Implementation Phases of the Plan
    The Five-Characters Plan states that it would be implemented upon 
the Commission's approval. Although the letters accompanying both 
proposed plans state that the parties will determine the development 
and implementation phase later or in accordance to a timetable to which 
the parties and the Processor will agree,\189\ the plans as submitted 
to the Commission both provided that the parties would commence the 
initial reservation process upon Commission approval.\190\ As discussed 
above, however, the Commission has modified the Five-Characters Plan to 
commence the initial reservation process 60 days from the Commission's 
approval of the plan.\191\ The Commission has made this modification in 
order to give the SROs that are not signatories to the Five-Characters 
Plan time to obtain the

[[Page 67232]]

necessary approvals to join the approved plan. The Commission believes 
60 days is a reasonable period of time to obtain such approval. The 
Commission notes that this approval order only requires SROs that 
choose to list securities or designate securities for quoting on a 
quotation medium to join the plan (and all such SROs were party to one 
of the two submitted plans); those SROs that do not intend to list or 
designate securities for quoting are not required to join the 
plan.\192\
---------------------------------------------------------------------------

    \189\ See Paragraph 4 of the letters accompanying each proposed 
plan.
    \190\ See Sections IV(b)(1) of both proposed plans.
    \191\ See discussion supra notes 141-143 and accompanying text.
    \192\ See supra notes 68-70 and accompanying text.
---------------------------------------------------------------------------

    The Commission finds that the modified implementation provision of 
the Five-Characters Plan will further the purposes of the Act because 
it allots additional time for non-signatory SROs to join the approved 
plan.
9. Terms and Conditions of Access
    Any SRO that meets the eligibility standards of the plan may become 
a party thereto by signing a current copy of the plan and paying to the 
other parties a share of the aggregate development costs previously 
paid by such parties to the Processor.
    The Commission finds that this provision of the Five-Characters 
Plan will further the purposes of the Act in that it should assure fair 
competition among exchange markets, in particular new SROs, consistent 
with Section 11A(a)(1)(C)(ii) of the Act.\193\
---------------------------------------------------------------------------

    \193\ 15 U.S.C. 78k-l(a)(1)(C)(ii).
---------------------------------------------------------------------------

IV. Conclusion

    It is hereby ordered, that pursuant to Section 11A(a)(3)(B) of the 
Act1 \194\ and Rule 608,\195\ that the Five-Characters Plan submitted 
by CHX, FINRA, Nasdaq, NSX, and Phlx, as modified herein, is approved 
and declared effective,\196\ and that CHX, FINRA, Nasdaq, NSX, and Phlx 
are authorized to act jointly to implement the Five-Characters Plan as 
a means of facilitating a national market system.
---------------------------------------------------------------------------

    \194\ 15 U.S.C. 78k-l(a)(3)(B).
    \195\ 17 CFR 242.608.
    \196\ The approved plan is attached here as Appendix A.
---------------------------------------------------------------------------

    It is hereby further ordered, that, within 60 days from the date of 
this approval order, any SRO that chooses to list securities on its 
market or to designate securities for quoting on a quotation medium 
must join the Five-Characters Plan, as modified herein,\197\ and act 
jointly with other parties to the plan to implement the approved Five-
Characters Plan.\198\
---------------------------------------------------------------------------

    \197\ Id.
    \198\ See 17 CFR 242.608(b)(2).

    By the Commission.
Florence E. Harmon,
Acting Secretary.

Appendix A--National Market System Plan for the Selection and 
Reservation of Securities Symbols

    The self-regulatory organizations (``SROs'') named below as the 
parties to this Plan (as defined below), and any other SROs that may 
subsequently become parties to this Plan, maintain facilities for 
the quoting and trade reporting of securities that: (i) Are NMS 
securities as currently defined in Rule 600(a)(46) under the 
Securities Exchange Act of 1934; and (ii) any other equity 
securities quoted, traded and/or trade reported through an SRO 
facility (collectively, ``Plan Securities''). These SROs have 
determined that in order to enhance the effectiveness and efficiency 
of the national market system and to provide for the fair 
competition between the SROs, they should establish a uniform system 
for the selection and reservation of securities symbols (the 
``Symbol Reservation System''). These SROs therefore have jointly 
developed and agreed upon the following Plan for this purpose, and 
have agreed to file it with the Securities and Exchange Commission 
(``Commission'') as a national market system plan in accordance with 
and subject to Rule 608 under the Securities Exchange Act of 1934, 
as amended (the ``Exchange Act''). The term ``Plan'' as used herein 
shall mean this plan as from time to time amended in accordance with 
the provisions hereof. As of 90 days from the Commission's approval 
of this Plan, this Plan will be the exclusive means of allocating 
and using symbols of 1, 2, 3, 4, or 5 characters in length, and 
there will be no difference between capital and lowercase letters 
under this Plan.
    The Intermarket Symbols Reservation Authority (``ISRA'') shall 
mean the parties to the Plan acting jointly pursuant to the terms of 
the Plan. Pursuant to Section 11A(a)(3)(B) of the Exchange Act, the 
Commission's approval of the Plan and any amendments thereto shall 
authorize and require the parties to the Plan to act jointly with 
respect to matters as to which they share authority hereunder in 
planning, developing and operating the systems and facilities used 
for this purpose, provided that such joint action shall be limited 
to circumstances in which it is necessary in order to fulfill the 
purposes and objectives as stated in the Plan.

I. Parties

    (a) The parties to the Plan are the following SROs:
    Chicago Stock Exchange, Inc. (``CHX''), registered as a national 
securities exchange under the Exchange Act and having its principal 
place of business at 440 South LaSalle Street, Chicago, IL 60605.
    Financial Industry Regulatory Authority, Inc., registered as a 
national securities association under the Exchange Act and having 
its principal place of business at 1735 K Street, NW., Washington, 
DC 20006.
    The Nasdaq Stock Market LLC (``NASDAQ'') registered as a 
national securities exchange under the Exchange Act and having its 
principal place of business at One Liberty Plaza, New York, NY, 
10006.
    National Stock Exchange, Inc. (``NSX''), registered as a 
national securities exchange under the Exchange Act and having its 
principal place of business at 440 South LaSalle Street, Suite 2600, 
Chicago, IL 60605.
    Philadelphia Stock Exchange, Inc. (``PHLX''), registered as a 
national securities exchange under the Exchange Act and having its 
principal place of business at 1900 Market Street, Philadelphia, 
Pennsylvania 19103.
    (b) Each of the parties represents to the other parties that (i) 
at any time it seeks to reserve symbols using 1, 2 or 3 characters, 
it will have the actual technical and physical capability through 
its facilities to immediately quote and trade report in Plan 
Securities using 1, 2 or 3 characters, and (ii) at any time it seeks 
to reserve symbols using 4 or 5 letter characters, it will have the 
actual technical and physical capability through its facilities to 
immediately quote and trade report trades in Plan Securities using 4 
or 5 characters. This Plan shall not apply in any respect to any 
suffix or special conditional identifier that may follow a ``root'' 
symbol of 1, 2, 3, 4 or 5 characters in length.
    (c) Any other SRO that maintains a market for the listing or 
trading of Plan Securities, in accordance with rules approved by the 
Commission, which securities are identified by one, two or three 
character symbols, on the one hand, or four or five character 
symbols, on the other hand, in each case prior to any suffix or 
special conditional identifier (``Applicant''), may become a party 
to the Plan. An Applicant may become a party to the Plan by signing 
a current copy of the Plan and paying to the other parties a 
proportionate share of the aggregate development costs previously 
paid by such parties to the Processor (as defined in Section III 
below), which aggregate development costs totaled $[amount to be 
determined after Plan effectiveness and implementation, and filed 
with the Commission as an amendment to the Plan].
    (d) Subject to Section VII below concerning the continuing 
liability of former parties for certain obligations under the Plan, 
an SRO that is a party to the Plan shall cease to be a party at such 
time as it ceases to maintain a facility for the quoting and trade 
reporting of securities transactions or ceases to use symbols 
subject to the Plan, unless such SRO asks to continue as a party and 
the other parties to the Plan, by a majority vote, approve such SRO 
to continue as a party.

II. Administration of ISRA

    (a) ISRA Policy Committee. ISRA shall be administered by a 
Policy Committee, which shall be constituted as provided in 
paragraph II(c), below.
    (b) Authority of Policy Committee. Except as otherwise expressly 
provided in the Plan, the ISRA Policy Committee shall make all 
policy decisions on behalf of ISRA in furtherance of the functions 
and objectives of ISRA under the Exchange Act and under the Plan, 
including but not limited to the following:
    (1) Overseeing the operation of the Symbol Reservation System 
and making all administrative decisions necessary with

[[Page 67233]]

respect to the operation of the system in accordance with the Plan;
    (2) Making all determinations pertaining to contracts with 
parties to the Plan or with other persons who provide goods or 
services to ISRA;
    (3) Determining all other questions pertaining to the planning, 
developing and operating of ISRA, including those pertaining to 
budgetary or financial matters.
    (c) Composition and Selection of Policy Committee. The Policy 
Committee shall consist of one voting member representing each party 
and one alternate voting member representing each party, with each 
alternate having a right to vote only in the absence of that party's 
voting member. Each of the voting and alternate voting members of 
the Policy Committee shall be appointed by the party that he or she 
represents, and shall serve at the will of the party appointing such 
member.
    (d) Action of Policy Committee. Each of the parties shall have 
one vote on all matters voted upon by the Policy Committee and, 
except as otherwise provided herein, action of ISRA under the Plan 
shall be authorized by the affirmative vote of a majority of the 
members of the Policy Committee, subject to the approval of the 
Commission whenever such approval is required under applicable 
provisions of the Exchange Act and the rules of the Commission 
thereunder. Action authorized in accordance with the Plan shall be 
binding upon all of the parties, without prejudice to the rights of 
any party to present contrary views to any regulatory body or in any 
other appropriate forum.
    (e) Meetings of the Policy Committee. Regular meetings of the 
Policy Committee may be attended by each party's voting 
representative or alternate voting representative, by one or more 
nonvoting representatives of the parties, and by such other persons 
that the Committee may invite to attend. Meetings of the Policy 
Committee shall be held at least annually and at such other times as 
shall from time to time be determined by the Policy Committee, on 
not less than ten (10) business days' notice. Special meetings of 
the Policy Committee may be called upon the request of two or more 
parties on not less than two (2) business days' notice. At each 
meeting of the Policy Committee, the Committee shall designate one 
of the representatives of the parties to preside as Chairman of the 
meeting and shall designate a person in attendance to act as 
Secretary to record the minutes thereof. The location of the regular 
and special meetings of the Policy Committee shall be determined by 
the Committee. Members of the Policy Committee may be present at a 
meeting by conference telephone or other electronic means that 
enables each of them to hear and be heard by all others present at 
the meeting, and action may be taken without a meeting if all of the 
members entitled to vote consent thereto in writing.

III. Performance of Functions

    As determined by its Policy Committee, ISRA will delegate the 
operation of the Symbol Reservation System to an independent third 
party (the ``Processor''), and will enter into contracts with such 
party describing the functions to be performed by it and the service 
levels and other terms related thereto. The Processor shall be 
required to agree that any nonpublic information that becomes known 
to it shall be held in confidence, except as it may be shared with 
the Commission or other appropriate governmental regulatory 
authorities or as otherwise required by applicable law.

IV. The Symbol Reservation System

    (a) Scope of the Symbol Reservation System. The Symbol 
Reservation System shall cover the allocation of all symbols used to 
identify Plan Securities. This Plan covers only the ``root'' symbol 
to be disseminated, which is the one through five character symbol, 
in each case prior to any suffix or special conditional identifier.
    (b) Reservation and Use of Symbols.
    (1) Submission of Initial Reservation Requests. Beginning 60 
days after the Commission's approval of this Plan, for a period of 
30 days, with respect to symbols for which a party meets the 
requirements of Section I.(b) at the time of approval, and within 45 
days after a party meets the requirements of Section I.(b) with 
respect to other symbols (unless such time is extended by the Policy 
Committee), such party may submit to the Processor requests for the 
initial reservation of symbols as follows. A party may request a 
symbol for: (i) The listing of common stock or any other security, 
including options; (ii) with respect to four- and five-character 
symbols, the trading of any security over-the-counter; (iii) the 
dissemination of a securities index or other index information; or 
(iv) any other purpose authorized by a majority vote of the parties. 
However, no party may reserve or use a 1, 2 or 3 character symbol 
for a security not listed on a national securities exchange. All 
initial symbol requests must specify whether the party believes that 
it had ``reserved'' a requested symbol in the system in use prior to 
the Commission's approval of this Plan. Initial requests may be for 
perpetual as well as limited-time reservations as specified below.
    (A) Perpetual Reservations. A requesting party may request to 
reserve a limited number of symbols without any time or other 
limitations or restrictions. A perpetual reservation is a ``List A 
reservation.'' A separate List A shall be maintained for symbols 
using one, two or three characters, on the one hand, and symbols 
using four or five characters, on the other hand, and this Plan 
shall be applied separately to each List A. For the avoidance of 
doubt, symbols under the List A for one, two or three characters and 
symbols under the List A for four or five characters are not 
interchangeable with one another for any purpose under this Plan. 
Subject to paragraph (d) below, a party may not add symbols to a 
given List A after the initial reservation process for that given 
list A. With respect to symbols using one, two or three characters, 
a party may not have more than 20 List A reservations. With respect 
to symbols using four or five characters, a party may not have more 
than 20 List A reservations. A party requesting to reserve more 
symbols than permitted pursuant to this paragraph must place its 
List A reservation requests in priority ranking.
    (B) Limited-Time Reservations. In addition to List A 
reservations, a party may submit requests to reserve symbols for a 
limited time period (``List B reservations''). A separate List B 
shall be maintained for symbols using one, two or three characters, 
on the one hand, and symbols using four or five characters, on the 
other hand, and this Plan shall be applied separately to each List 
B. Symbols under the two lists are not interchangeable for any 
purpose under this Plan. With respect to symbols using one, two or 
three characters each party may have a total of up to 1,500 List B 
reservations at any given time. With respect to symbols using four 
or five characters, each party may have up to a total of 1,500 List 
B reservations. A party's permitted List B reservations shall be for 
24 months. A party requesting to reserve more symbols than permitted 
pursuant to this paragraph must place its List B reservation 
requests in priority ranking. Notwithstanding anything else herein 
this sub-paragraph (B), 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.
    (2) The Processing of Initial Reservation Requests.
    (A) If only one party claims that it had a symbol properly 
``reserved'' prior to the effective date of this Plan (A ``Legacy 
Reservation''), the Processor shall reserve such symbol for that 
party, provided that party represents it has a reasonable basis to 
believe it will utilize such symbol within the next six (6) months. 
Legacy Reservations shall not be counted as List A or List B 
reservations for the purposes of sub-paragraphs (1)(A) and (1)(B) of 
this Section. Should the relevant party not use a symbol that is the 
subject of a Legacy Reservation within the six (6) month period, 
said symbol shall be released by the Processor pursuant to paragraph 
5 below, provided that a party may request an extension of a Legacy 
Reservation for an additional six (6) month period provided said 
party has a reasonable basis to believe it will utilize such symbol 
within that period. If not so used within that period, said symbol 
shall be released by the Processor pursuant to paragraph 5 below.
    (B) If multiple parties meeting the requirements of sub-
paragraph (A) above claim to have properly reserved a symbol prior 
to the Commission's approval of this Plan, the Processor shall 
notify all parties making such claims of that fact, whereupon such 
parties shall have five business days in which to reach a mutually 
acceptable agreement as to which party shall be permitted to reserve 
such symbol. If the parties fail to reach agreement during such 
period, then the Policy Committee shall resolve such conflicting 
claims (in favor of the party with the earliest proper claim to such 
symbol, if that fact can be determined) by a majority vote of the 
parties not claiming such symbol, it being understood that proper 
reservation of a symbol includes reservation under the reservation 
system in effect prior to the adoption of this Plan. The Policy 
Committee shall provide each such party the

[[Page 67234]]

opportunity to provide evidence of how and when it reserved such 
symbol, and the members of the Policy Committee who vote in these 
matters shall in good faith consider such evidence in reaching their 
decision. In the event of a tie vote, the Policy Committee shall 
establish a random order of the parties to determine which party may 
reserve the symbol.
    (C) If only one party seeks to reserve a symbol that no party 
has properly reserved prior to the Commission's approval of this 
Plan, then the Processor shall reserve that symbol for that party.
    (D) If multiple parties seek to reserve a symbol, but no such 
party claims to have properly reserved the symbol prior to the 
Commission's approval of this Plan, then the Processor shall reserve 
such symbol pursuant to a random ordering of the parties that the 
Policy Committee shall establish.
    (E) If a party requests a symbol that is not available because 
the symbol is in use or has properly been reserved by another party, 
the Processor will place all such parties on a waiting list for the 
symbol pursuant to paragraph (c) below.
    (F) Using this methodology, the Processor will reserve for a 
party all requested symbols up to the limits specified above for 
List A and List B based on the requesting party's priority ranking. 
Once a party has reached its limit on the number of permitted List A 
reservations, the Processor will process all such party's remaining 
requests for List A symbols as List B requests before processing 
that party's requests for List B reservations.
    (3) Subsequent Reservations. At any time following the initial 
allocation of symbols pursuant to paragraphs (1) and (2) above, a 
party may submit to the Processor a request for a List B reservation 
of one or more symbols as follows:
    (A) If a requested symbol is available the Processor will 
reserve the symbol for the requesting party if at that time it does 
not hold the maximum number of List B reservations available to it. 
If necessary to stay within the maximum number of reservations 
permitted under subparagraph (1)(B) above, the party must provide 
the Processor with a List B symbol to release upon reservation of 
the new symbol.
    (B) If a requested symbol is not available either because it is 
in use or because another party has reserved the symbol, the 
Processor will place the party on the waiting list pursuant to 
paragraph (c) below.
    (4) Notice of Use of Reserved Symbols. A party shall notify the 
Processor when it begins to use a reserved symbol.
    (5) Non-Use or Release of Symbols Within Time Period. If a 
symbol reserved on List B is not used within the specified 24-month 
time limit, the Processor shall release the symbol. In addition, a 
party at any time may voluntarily release a reserved symbol by so 
notifying the Processor. In either case, the Processor shall make 
the symbol available for reservation to those parties on the waiting 
list pursuant to subparagraph (c)(2) below. If there is no waiting 
list for the symbol, or if no party on such list decides to reserve 
the symbol, the Processor shall give reasonable notice to all 
parties of the availability of the symbol, and any party may request 
the reservation of such symbol. If more than one party requests the 
reservation of such symbol within two business days of such notice, 
the Processor shall assign the symbol to one such party and shall 
place the other parties on the waiting list pursuant to a random 
order of priority that the Policy Committee shall establish. If 
necessary to stay within the maximum number of reservations 
permitted under subparagraph (1)(B) above, the requesting party must 
voluntarily release a symbol, as described in subparagraph (3)(A) 
above, before it can reserve the assigned symbol.
    (6) Request for Release of a Symbol. If a party has an immediate 
need to use a symbol that another party reserved, it can ask (i) the 
party that has the symbol reserved and (ii) any other parties on the 
waiting list with priority over the requesting party whether such 
parties are willing to release such symbols. If any such party does 
not agree to the release, the then-current reservation and waiting 
list priority shall remain unchanged. If all such parties agree to 
the release, then the requesting party may include such symbol as 
one of its List B reservations for 24 months. If necessary to stay 
within the maximum number of reservations permitted under 
subparagraph (1)(B) above, the requesting party must voluntarily 
release a symbol, as detailed in subparagraph (3)(A) above, before 
it can reserve the requested symbol. If the requesting party does 
not use the symbol within 24 months, absent the consent of all the 
parties initially required to be contacted, the reservation and 
waiting list priority in effect when the requesting party first made 
its request shall again be in force.
    (c) Waiting List.
    (1) Placing a Party on a Waiting List. Pursuant to subparagraphs 
(2)(D) and (3)(B) above, if one or more parties request to reserve a 
symbol that another party has under reservation, the Processor shall 
place such parties on a waiting list for such symbol. The Processor 
shall prioritize parties on the waiting list based on the earliest 
time that each requested the reservation from the Processor; 
provided, however, that if more than one party seeks to use a symbol 
already in use either (A) during the initial reservation period or 
(B) within two business days of notice of a symbol's availability 
under subparagraph (b)(5) above, the Policy Committee shall 
establish a random order of those parties to determine priority on 
the waiting list.
    (2) Availability of Symbols. Subject to paragraph (d) below, if 
a symbol becomes available for any reason, the Processor shall 
provide the party with time priority on the waiting list as to that 
symbol with notice of such availability. Such party shall have two 
business days to reserve the symbol. If the party with priority does 
not reserve the symbol, the Processor shall repeat this process as 
needed with all parties on the waiting list in the order of their 
priority. If necessary to stay within the maximum number of 
reservations permitted under subparagraph (b)(1)(B) above, the 
reserving party must voluntarily release or redesignate a symbol, as 
detailed in subparagraph (b)(3)(A) above, before it can reserve the 
requested symbol.
    (3) Waiting List Limits. No party may be on the waiting list for 
more than 100 symbols at any given time.
    (d) Reuse of a Symbol. Subject to paragraph (f) below, if a 
party ceases to use a symbol (due, for example, but not limited to, 
the delisting of a security through merger or otherwise), such party 
automatically shall have that symbol reserved for a period of 24 
months, notwithstanding any other limits on the number of reserved 
symbols specified in this Plan. If at the time it ceases to use a 
symbol that party does not then have reserved on List A the full 
number of symbols initially available to it pursuant to subparagraph 
(b)(1)(A) above, the party may place such symbol on List A. If the 
party has reserved on List A the full number of symbols available to 
it, that party may move a List A symbol to List B in order to place 
the symbol to be reused on List A, notwithstanding the fact that the 
party may then have the maximum number of symbols reserved on List 
B. If the party does not place the symbol on List A, and if the 
party does not use the symbol within 24 months, the symbol shall be 
released for use pursuant to subparagraph (b)(5) above. A symbol may 
not be reused by a party to identify a new security (other than the 
security that has been trading under such symbol), unless the party 
reasonably determines that such use would not cause investor 
confusion.
    (e) Database. The Processor shall create and maintain a symbol 
reservation database (``Database''). All parties and the Commission 
(but no other person) shall have access to the Database except to 
the extent required by applicable law. The Database shall show:
    (1) All symbols that are currently in use, identifying the party 
using a symbol;
    (2) All symbols that are reserved on Lists A and B (separately 
for symbols using one, two or three characters on the one hand, and 
four or five characters on the other hand), including the party 
reserving each symbol and the date on which List B reservations will 
lapse if the symbol is not used; and
    (3) Whether there is a waiting list for a symbol, and if so, the 
identities and priorities of the parties on the waiting list.
    (f) Portability of Symbols in Use. If an SRO (a ``New SRO'') 
lists a security or product that previously was listed on another 
SRO (a ``Former SRO''), the New SRO shall have the rights to that 
symbol unless, in its discretion, it consents to the symbol being 
retained by the Former SRO.

V. Financial Matters.

    (a) Initial Development Costs. The parties will share the 
initial development costs pro-rata based on the number of symbols 
initially reserved by each party pursuant to Section IV, paragraph 
B(1) hereof. Any new party that joins the plan shall be liable for a 
pro-rata portion of the initial development costs based upon the 
number of symbols reserved by said party during the first twelve 
(12) months of such party's membership.
    (b) Continuing Costs. Costs and expenses of ISRA (other than 
development costs) will be shared among the parties pro-rata based 
on the number of additional symbols reserved in each calendar year, 
estimated quarterly. Notwithstanding the foregoing, the Policy

[[Page 67235]]

Committee may devise alternative cost-allocation methodology with 
respect to special non-initial development projects.

 VI. Confidentiality

    The Processor will maintain in the strictest confidence all of 
the information it receives from the parties. The only information 
the Processor will make available to the parties is the Database. 
The Processor will not make the Database available to any person 
other than the parties or the Commission, except to the extent 
required by applicable law.

VII. Term of Plan Withdrawal; Non-Transferability of Rights Under 
the Plan

    The Plan shall remain in effect so long as there are two or more 
parties to the Plan. Any party may withdraw from the Plan at any 
time on not less than six months prior written notice to each of the 
other parties. Any party withdrawing from the Plan shall remain 
liable for its proportionate share of costs and expenses allocated 
to it pursuant to Section V above for the period during which it was 
a party, but it shall have no further obligations under the Plan or 
to any of the other parties with respect to the period following the 
effectiveness of its withdrawal. The right of a party to participate 
in the Symbol Reservation System under the Plan shall not be 
transferable without the consent of the other parties, provided, 
however, that if a party is subject to a merger, combination or 
other reorganization or the sale of all or substantially all of its 
assets, including it's registration as an SRO, the surviving or 
acquiring entity shall automatically become subject to the Plan and 
may use the Symbol Reservation System instead of the prior party and 
with its rights and subject to its liabilities under the Plan.

 VIII. Amendments to the Plan

    The Plan may be amended from time to time when authorized by the 
affirmative vote of all of the parties subject to any required 
approval of the Commission.

IX. Applicability of Exchange Act

    The rights and obligations of the parties to the Plan shall at 
all times be subject to any applicable provisions of the Exchange 
Act and any rules and regulations promulgated hereunder.

X. Notices

    Any notice given to any of the parties or to ISRA for purposes 
of the Plan shall be via electronic mail. All notices shall be 
deemed given immediately, unless the sender receives notification of 
a failure to deliver the electronic mail. Alternatively, a party may 
give notice in writing, and shall be deemed given 48 hours after 
being sent if sent by prepaid registered or certified United States 
mail, return receipt requested (if available), or by overnight mail 
with a nationally recognized overnight mail courier, addressed to 
the party at its address indicated below in the case of notice to 
one or more parties, or addressed to all of the parties at their 
addresses listed in Section I above.

XI. Counterparts and Signatures

    The Plan may be executed in any number of counterparts, no one 
of which need contain all signatures of all Participants, and as 
many of such counterparts as shall together contain all such 
signatures shall constitute one and the same instrument.

IN WITNESS WHEREOF, this Plan has been executed as of the -- day of 
---- by each of the parties hereto.

CHICAGO STOCK EXCHANGE, INC.
By:--------------------------------------------------------------------
FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.
BY:--------------------------------------------------------------------
THE NASDAQ STOCK MARKET, LLC
By:--------------------------------------------------------------------
NATIONAL STOCK EXCHANGE, INC.
By:--------------------------------------------------------------------
PHILADELPHIA STOCK EXCHANGE, INC.
By:--------------------------------------------------------------------
 [FR Doc. E8-26880 Filed 11-12-08; 8:45 am]

BILLING CODE 8011-01-P
