[Federal Register Volume 87, Number 111 (Thursday, June 9, 2022)]
[Notices]
[Pages 35270-35272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12396]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95040; File No. 4-533]


Joint Industry Plan; Order Approving Amendment No. 4 to the 
National Market System Plan for the Selection and Reservation of 
Securities Symbols Submitted by The Nasdaq Stock Market LLC, BOX 
Exchange LLC, Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., CBOE 
EDGX Exchange, Inc., Cboe Exchange, Inc., Financial Industry Regulatory 
Authority, Inc., Investors Exchange LLC, Long-Term Stock Exchange, 
Inc., MEMX LLC, Miami International Securities Exchange, LLC, MIAX 
PEARL, LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq PHLX LLC, New York 
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, 
Inc., and NYSE National, Inc.

June 3, 2022.

I. Introduction

    On February 11, 2021,\1\ The Nasdaq Stock Market LLC (``Nasdaq''), 
on behalf of itself and the participants to the National Market System 
Plan for the Selection and Reservation of Securities Symbols 
(``Symbology Plan'' or ``Plan''), filed with the Securities and 
Exchange Commission (``Commission''), pursuant to Section 11A of the 
Securities Exchange Act of 1934 (``Act'') \2\ and Rule 608 of 
Regulation National Market System (``NMS'') thereunder,\3\ a proposal 
to amend the Symbology Plan.\4\ The proposal represents the fourth 
substantive amendment to the Plan (``Amendment'') and reflects changes 
unanimously approved by the Plan participants (``Participants'').\5\ 
Amendment No. 4 was published for comment in the Federal Register on 
March 8, 2022.\6\ On April 13, 2022, Nasdaq submitted a letter to the 
Commission related to Amendment No. 4, which corrected an error in the 
Plan document included in the original filing.\7\ This Order approves 
Amendment No. 4 to the Plan as reflected in the Modification Letter.
---------------------------------------------------------------------------

    \1\ See Letter from Jeffrey S. Davis, Senior Vice President and 
Senior Deputy General Counsel, Nasdaq, to Vanessa Countryman, 
Secretary, Commission (Feb. 11, 2022).
    \2\ 15 U.S.C 78k-1(a)(3).
    \3\ 17 CFR 242.608.
    \4\ The Plan was created to enhance the effectiveness and 
efficiency of the national market system and to provide for fair 
competition between the self-regulatory organizations that list 
equity securities by establishing a uniform system for the selection 
and reservation of securities symbols. The Plan, among other things, 
sets forth the process for securing perpetual and limited-time 
reservations, the use of a waiting list, the right to reuse a symbol 
and the ability to request the release of a symbol.
    \5\ The Plan Participants are BOX Exchange LLC, Cboe BZX 
Exchange, Inc., Cboe EDGA Exchange, Inc., CBOE EDGX Exchange, Inc., 
Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc., 
Investors Exchange LLC, Long-Term Stock Exchange, Inc., MEMX LLC, 
Miami International Securities Exchange, LLC, MIAX PEARL, LLC, 
Nasdaq, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq PHLX LLC, New York 
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE 
Chicago, Inc., and NYSE National, Inc.
    \6\ See Securities Exchange Act Release No. 94351 (March 2, 
2022), 87 FR 13027 (March 8, 2022) (``Amendment No. 4 Notice''). The 
Commission received comment letters that are not germane to the 
Amendment and are available on the Commission's website at: https://www.sec.gov/comments/4-533/4-533.htm.
    \7\ See Letter from Jeffrey S. Davis, Senior Vice President and 
Senior Deputy General Counsel, Nasdaq, to Vanessa Countryman, 
Secretary, Commission, dated April 13, 2022 (``Modification 
Letter''). In the Modification Letter, the Participants corrected 
the list of Participants that was submitted with the Amendment. The 
Plan submitted with the Amendment included two exchanges that are 
not currently Participants in the Plan. The Plan submitted with the 
Modification Letter reflects the current Participants in the Plan 
and made no other changes to the Amendment.
---------------------------------------------------------------------------

II. Background and Description of the Proposal

A. Background

    The Plan was created to establish a uniform system for the 
selection and reservation of securities symbols and sets forth, among 
other things, the process for securing symbol reservations, the use of 
a waiting list, the ability to request the release of a symbol, and the 
ability to reuse a symbol, provided that it does not create investor 
confusion. Currently, Section IV of the Plan outlines the procedures 
for the symbol reservation system, and provides Participants the 
ability to reserve 20 perpetual (``List A'') and 1,500 limited-time 
(``List B'') reservations, for 1-, 2-, and 3-character symbols, on the 
one hand, and also for 4- and 5-character symbols, on the other. For 
List B reservations, the Plan requires Plan Participants to have a 
reasonable basis to believe that it will use the symbol within 24 
months in order to reserve a symbol, but does not include a requirement 
that such basis be furnished or that a symbol be reserved for a 
specific issuer. There is also a process for reserving symbols under 
the Plan, which provides for the use of a third-party processor and a 
symbol reservation database. The Plan also includes, among other 
things, provisions for the use of a waiting list, the right to reuse a 
symbol, the ability to request the release of a symbol, the terms of 
confidentiality, and the process for becoming a new Plan 
participant.\8\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 58904, 73 FR 67218 
at 67222-23 (November 13, 2008) (File No. 4-533) (``Symbology Plan 
Approval Order'').
---------------------------------------------------------------------------

B. Description of Proposal

    In Amendment No. 4, the Participants propose to modify the Plan in 
several aspects: (1) to require the release of all perpetual (List A) 
reservations, except for those used for test symbols; (2) to increase 
the number of List B symbols that can be reserved for 1-, 2-, and 3-
character symbols and for 4- and 5-character symbols, respectively, 
from 1,500 to 2,500 symbols; (3) to require a party making a List B 
reservation to specify confidentially an issuer associated with that 
reservation and to maintain documentation supporting that request; (4) 
to require List B reservations for exchange-traded products to be made 
at the request of the issuer (or its agent); (5) to require 
Participants to release any symbol that it no longer has a reasonable 
basis for believing that the issuer will list a security using the 
symbol; (6) to require a reservation for an issuer to be transferred to 
another Participant, if it decides to list on that Participant; (7) to 
prohibit the reservation of more than one symbol for a potential 
listing that is not an exchange-traded product; (8) to allow 
Participants who have reserved a symbol for one issuer to be on the 
waitlist for that symbol for another issuer; and (9) to eliminate the 
costs of entry for new Participants to the Plan, consistent with 
existing practice. In addition, Amendment No. 4 also includes several 
technical and

[[Page 35271]]

ministerial proposed changes to provide current information about the 
names and principal place of business of certain Participants to the 
Plan, and also makes changes to update outdated language in Sections 
IV(b)(1-3) and (c)(1) the Plan regarding reservations prior to the 
original effective date of the Symbology Plan.\9\
---------------------------------------------------------------------------

    \9\ See Amendment No. 4 Notice, supra note 6, for a more 
detailed description of the proposed changes. See also Modification 
Letter, supra note 7.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission is approving Amendment No. 4, 
as modified, for the reasons discussed below. Section 11A of the Act 
authorizes the Commission, by rule or order, to authorize or require 
the self-regulatory organizations to act jointly with respect to 
matters as to which they share authority under the Act in planning, 
developing, operating, or regulating a facility of the national market 
system.\10\ Rule 608 of Regulation NMS authorizes two or more SROs, 
acting jointly, to file with the Commission proposed amendments to an 
effective NMS plan,\11\ and further provides that the Commission shall 
approve an amendment to an effective NMS plan if it finds that the 
amendment is necessary or appropriate in the public interest, for the 
protection of investors and the maintenance of fair and orderly 
markets, to remove impediments to, and perfect the mechanisms of, a 
national market system, or otherwise in furtherance of the purposes of 
the Act.\12\
---------------------------------------------------------------------------

    \10\ See 15 U.S.C. 78k-1(a)(3)(B).
    \11\ See 17 CFR 242.608.
    \12\ See 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

    The Commission believes that Amendment No. 4, as modified, is 
consistent with the Act and meets the applicable standard provided in 
Rule 608 of Regulation NMS.\13\ As described in the Notice, the Plan 
Participants seek to amend the Symbology Plan to eliminate perpetual 
reservations (except for test symbols), increase the number of List B, 
limited-time symbol reservations, and make certain other amendments to 
the Plan regarding the processes by which Plan Participants may make 
symbol reservations.
---------------------------------------------------------------------------

    \13\ See 17 CFR 242.608.
---------------------------------------------------------------------------

    With respect to List A reservations, the Plan Participants have 
agreed to release all their perpetual reservations and eliminate all 
perpetual reservations, except for those used as test symbols. The 
Participants stated that elimination of perpetual reservations was 
proposed in connection with the changes to require that all 
reservations be made at the request of an issuer. The Commission 
believes that removing the List A perpetual reservations other than 
test symbols will help to ensure that Participants can only reserve 
symbols related to identified issuers, which should promote fair 
competition among exchanges that list securities. Ensuring that 
Participants can only reserve symbols related to identified issuers is 
also appropriate in the public interest because it should enable 
issuers to make listing decisions based on factors that relate to the 
quality of the listing markets, rather than on considerations of symbol 
reservation.
    With respect to List B reservations, the Amendment proposes to 
amend Section IV(b)(1)(B) to increase the number of symbol reservations 
that a party can reserve from 1,500 to 2,500 symbols for symbols using 
one, two or three characters, on the one hand, and for symbols using 
four or five symbols, on the other hand. In the Notice, the Plan 
Participants stated that this increase is ``necessary given the 
substantial increase in the number of IPOs and other new listings,'' 
and noted that IPOs were at a 20-year low, with 62 IPOs that year, at 
the time the Symbology Plan was approved in 2008, whereas more 
recently, there were 480 and 1,058 IPOs in 2020 and 2021, 
respectively.\14\ The Plan Participants also pointed to an increase in 
recent years in the popularity of SPACs, which has similarly 
necessitated the need to reserve of more symbols.\15\ The Plan 
Participants stated that, given this current activity, the original 
1,500 symbol reservation limits for one, two or three character 
symbols, on the one hand, and for four or five character symbols, on 
the other hand, are no longer appropriate. In approving the Symbology 
Plan in 2008, the Commission discussed the history of ticker symbols 
and noted that the increasing scarcity of available symbols highlighted 
the need for a NMS plan to efficiently and fairly manage the supply of 
ticker symbols.\16\ At that time, the Commission believed that the 
allotment of 1,500 List B reservations for symbols using one, two or 
three characters, on the one hand, and for symbols using four or five 
symbols, on the other hand, was sufficient to allow Plan Participants 
to reserve ``a sufficient number of symbols in the short-term for any 
pending use.'' \17\ The Commission believes that it is appropriate for 
the maintenance of fair and orderly markets to increase the number of 
List B symbol reservations to accommodate recent listing activity.
---------------------------------------------------------------------------

    \14\ See Notice, supra, at 13028.
    \15\ Specifically, according to the Participants, there were 613 
SPAC IPOs in 2021 as compared to 248 SPAC IPOs in 2020, representing 
a 247% increase. See id.
    \16\ See Symbology Plan Approval Order, supra note 9, at 67219-
20. In the Symbology Plan Approval Order, the Commission stated that 
several factors have been increasing the demand particularly for 
one, two and three character symbols, including: increased listings 
of innovative products such as exchange-traded funds; the move by 
Nasdaq to begin using one, two and three character symbols; and the 
proliferation of standardized options.
    \17\ See Symbology Plan Approval Order at 67225.
---------------------------------------------------------------------------

    The Plan Participants also seek to make certain other amendments to 
Section IV(b)(1)(B) of the Plan with respect to the process for symbol 
reservations, including specifying that: (i) no party shall make a List 
B reservation request with respect to a particular symbol unless said 
party has a reasonable basis to believe it will utilize such symbol 
within the next 24 months; (ii) each List B request made by a party for 
non-exchange traded products must be made in connection with the 
potential listing of a security on such party at the request of the 
issuer (or an agent of the issuer) of such security, and the reserving 
party must confidentially indicate the potential listing in the Symbol 
Reservation System and maintain documentation demonstrating that it has 
a reasonable basis to believe that it will utilize such symbol for the 
listing of such security within the next 24 months; (iii) all List B 
reservation requests made by a party for exchange-traded products must 
be made at the request of the issuer (or an agent of the issuer) of 
such security; (iv) the party shall release the symbol if it no longer 
reasonably believes that the issuer will list a security using the 
symbol; and (v) a party shall not reserve more than one symbol per 
potential security listing that is not an exchange-traded product.\18\ 
The Plan Participants state that these changes are intended to ensure 
that each party reserves a symbol in connection with a potential 
listing. The Commission believes that the amendments to Section 
IV(b)(1)(B) that put in place requirements for the request of a symbol 
reservation are appropriate in the public interest because they should 
help to ensure that the Plan operates in a fair and orderly manner by 
requiring each party to reserve symbols in connection with a potential 
listing. In addition, sub clauses (iii) and (v) would put in place a 
process to allow exchanges to reserve multiple symbols at the request 
of an issuer for exchange-traded products that

[[Page 35272]]

is listing multiple potential securities, as these issuers commonly 
issue more than one product with different root symbols, unlike 
corporate issuers who rely on the same root symbol even where they have 
multiple classes. The Commission believes that allowing exchanges to 
reserve multiple symbols for issuers of such exchange-traded products 
is appropriate in the public interest because it should reduce investor 
confusion by allowing related exchange-traded products to potentially 
have similar symbols. The Amendment also makes changes to the waitlist 
provision in Section IV(b)(6)(c) that relate to the new List B 
reservation process. Specifically, the Amendment would permit 
Participants that already have a symbol reserved for a potential issuer 
to be placed on the waitlist for the same symbol on behalf of another 
potential issuer. The Commission believes that this change should 
promote fair competition among the exchanges by allowing such 
Participant to be placed on the waitlist, similar to other 
Participants.
---------------------------------------------------------------------------

    \18\ A corresponding clarifying change is proposed to Section 
IV(b)(3)(C) to clarify that List B reservation requests must be 
submitted in accordance with sub clauses (i) to (v) of Section 
IV(b)(1)(B).
---------------------------------------------------------------------------

    The Participants also propose to amend Section I(c) of the Plan to 
eliminate the costs of entry for new participants because, as the 
Amendment notes, the pro rata costs for new participants have been de 
minimis or zero in recent years. The Commission believes that amending 
Section I(c) of the Plan to eliminate such costs should remove 
impediments to, and perfect the mechanisms of, a national market 
system, by removing what has become an administrative burden for new 
participants. In addition, the Amendment makes other technical and 
ministerial changes to clarify provisions that pertain only to the 
initial operation of the Plan and to update Participant 
information.\19\ The Commission believes that these changes are 
appropriate in the public interest and consistent with the Act, because 
they will provide clarifying and more accurate information about the 
existing practices under the Plan and also updated information about 
the Plan Participants.
---------------------------------------------------------------------------

    \19\ See Modification Letter, supra note 7.
---------------------------------------------------------------------------

    For the reasons discussed, the Commission finds that Amendment No. 
4 to the Plan, as reflected in the Modification Letter, is consistent 
with the requirements of the Act and the rules and regulations 
thereunder, and in particular, Section 11A of the Act \20\ and Rule 608 
\21\ thereunder in that Amendment No. 4 is appropriate in the public 
interest, for the protection of investors and the maintenance of fair 
and orderly markets, to remove impediments to, and perfect the 
mechanisms of, a national market system.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78k-1.
    \21\ 17 CFR 242.608.
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act,\22\ 
and Rule 608(b)(2) thereunder,\23\ that Amendment No. 4 to the Plan, as 
modified, (File No. 4-533) is approved.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78k-1.
    \23\ 17 CFR 242.608(b)(2).

    By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-12396 Filed 6-8-22; 8:45 am]
BILLING CODE 8011-01-P


