Document ID: SEC-2022-0316-0001
Agency: sec
Document Type: Notice
Title: Joint Industry Plan: National Market System Plan for the Selection and Reservation of Securities Symbols
Posted Date: 2022-03-08T05:00Z

[Federal Register Volume 87, Number 45 (Tuesday, March 8, 2022)]
[Notices]
[Pages 13027-13030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04834]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94351; File No. 4-533]

Joint Industry Plan; Notice of Filing of Amendment No. 4 to the 
National Market System Plan for the Selection and Reservation of 
Securities Symbols

March 2, 2022.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on February 11, 2022, The Nasdaq Stock Market LLC (``Nasdaq''), on 
behalf of participants to the National Market System Plan for the 
Selection and Reservation of Securities Symbols (``Symbology Plan'' or 
``Plan'') filed with the Securities and Exchange Commission 
(``Commission'') a proposal to amend the Symbology Plan.\3\ The 
proposal represents the fourth substantive amendment to the Plan 
(``Amendment'') and reflects changes unanimously approved by the Plan 
participants (``Participants'').\4\ The Amendment proposes to, among 
other things, eliminate certain Plan processor costs, release perpetual 
reservations, increase the number of limited-time symbol reservations, 
modify the waitlist provisions, and clarify the portability of symbol 
reservations.
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    \1\ 15 U.S.C. 78k-1(a)(3).
    \2\ 17 CFR 242.608.
    \3\ The Plan was created to enhance the effectiveness and 
efficiency of the national market system and to provide for fair 
competition between the self-regulatory organizations that list 
equity securities by establishing a uniform system for the selection 
and reservation of securities symbols. The Plan, among other things, 
sets forth the process for securing perpetual and limited-time 
reservations, the use of a waiting list, the right to reuse a symbol 
and the ability to request the release of a symbol.
    \4\ The Plan Participants are BOX Exchange LLC, Cboe BYX 
Exchange, Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., 
Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Chicago Board 
Options Exchange, Incorporated, Financial Industry Regulatory 
Authority, Investors Exchange LLC, Long-Term Stock Exchange, Inc., 
MEMX LLC, Miami International Securities Exchange, LLC, MIAX Pearl, 
LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq PHLX LLC, Nasdaq, New 
York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE 
Chicago, Inc., and NYSE National, Inc.
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    The proposed Amendment has been filed by the Participants pursuant 
to Rule 608(b)(2) under Regulation NMS.\5\ The Commission is publishing 
this notice to solicit comments on the proposed Amendment from 
interested persons. Sections I and II contain statements that were 
prepared and submitted to the Commission by the Participants about the 
purpose of the Amendment, along with information pursuant to Rule 
608(a) under the Act.
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    \5\ 17 CFR 242.608(b)(2).
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I. Rule 608(a)

A. Purpose of the Amendment

    Since the Symbology Plan was originally approved,\6\ it has been 
modified several times to add additional participants.\7\ The plan 
participants now

[[Page 13028]]

seek to amend the Symbology Plan as set forth below, and attached [sic] 
hereto as Exhibit A.
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    \6\ On November 6, 2008, the Commission approved the Symbology 
Plan that was originally proposed by the Chicago Stock Exchange, 
Inc. (``CHX''), The Nasdaq Stock Market, Inc. (n/k/a The Nasdaq 
Stock Market LLC) (``Nasdaq''), National Association of Securities 
Dealers, Inc. (``NASD'') (n/k/a Financial Industry Regulatory 
Authority, Inc. (``FINRA'')), National Stock Exchange, Inc. 
(``NSX'') (n/k/a NYSE National, Inc. (``NYSE National'')), and 
Philadelphia Stock Exchange, Inc. (n/k/a Nasdaq PHLX LLC 
(``Phlx'')), subject to certain changes. See Securities Exchange Act 
Release No. 58904, 73 FR 67218 (November 13, 2008) (File No. 4-533).
    \7\ On November 18, 2008, ISE filed with the Commission an 
amendment to the Plan to add ISE as a member to the Plan. See 
Securities and Exchange Act Release No. 59024 (November 26, 2008), 
73 FR 74538 (December 8, 2008) (File No. 4-533). On December 22, 
2008, NYSE, NYSE Arca, and NYSE Alternext (n/k/a NYSE American) 
(``NYSE Group Exchanges''), and Cboe filed with the Commission 
amendments to the Plan to add the NYSE Group Exchanges and Cboe as 
members to the Plan. See Securities Exchange Act Release No. 59162 
(December 24, 2008), 74 FR 132 (January 2, 2009) (File No. 4-533). 
On December 24, 2008, BSE (n/k/a BX) filed with the Commission an 
amendment to the Plan to add BSE as a member to the Plan. See 
Securities Exchange Act Release No. 59187 (December 30, 2008), 74 FR 
729 (January 7, 2009) (File No. 4-533). On September 30, 2009, BATS 
(n/k/a CboeBZX) filed with the Commission an amendment to the Plan 
to add BATS as a member to the Plan. See Securities Exchange Act 
Release No. 60856 (October 21, 2009), 74 FR 55276 (October 27, 2009) 
(File No. 4-533). On July 7, 2010, EDGA (n/k/a CboeEDGA) and EDGX 
(n/k/a CboeEDGX) filed with the Commission an amendment to the Plan 
to add EDGA and EDGX, each as a party to the Symbology Plan. See 
Securities Exchange Act Release No. 62573 (July 26, 2010), 75 FR 
45682 (August 3, 2010) (File No. 4-533). On May 7, 2012, BOX filed 
with the Commission an amendment to the Plan to add BOX as a member 
to the Plan. See Securities and Exchange Act Release No. 66957 (May 
10, 2012), 77 FR 28904 (May 16, 2012). On November 4, 2016, IEX 
filed with the Commission an amendment to the Plan to add IEX as a 
member to the Plan. See Securities Exchange Act Release No. 79422 
(November 29, 2016), 81 FR 87645 (December 5, 2016). On February 26, 
2018, MIAX filed with the Commission an amendment to the Plan to add 
MIAX as a member to the Plan. See Securities Exchange Act Release 
No. 82885 (March 15, 2018), 83 FR 12430 (March 21, 2018). On October 
17, 2019, LTSE filed with the Commission an amendment to the Plan to 
add LTSE as a member to the Plan. See Securities Exchange Act 
Release No. 87597 (November 22, 2019), 84 FR 65448 (November 27, 
2019). On July 6, 2020, MEMX filed with the Commission an amendment 
to the Plan to add MEMX as a member to the Plan. See Securities 
Exchange Act Release No. 89419 (July 29, 2020), 85 FR 46767 (August 
3, 2020).
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Plan Processor Costs (Section I(c))
    The participants seek to amend Section I(c) to require new parties 
to provide a signed copy of the Symbology Plan to the Commission and 
become a party to any contract required pursuant to Section III with 
the Processor. These changes are intended to codify existing practices.
    In addition, the participants seek to eliminate the costs of entry 
for new participants. The Processor found that in recent years, the 
calculated pro rata amounts were de minimus or zero, and the 
participants are therefore proposing this change to help modernize the 
process and remove burdensome administrative tasks.
Perpetual Reservations (Section IV(b)(1)(A) and (d))
    The parties seek amend Section IV(b)(1)(A) to release their list of 
perpetual reservations (``List A reservations''), effective 30 calendar 
days following the date of the Commission's approval of the amendment 
to the Symbology Plan, except for those symbols which are used only for 
the purpose of system testing (``Test Symbols''). No new List A 
reservations shall be made, and parties shall not maintain a List A 
reservation, except for the purpose of reserving Test Symbols. This 
change is intended to supplement the changes described below to require 
all symbol reservations to be made at the request of an issuer in 
connection with a potential listing. The parties also seek to amend 
Sections IV(b)(1)(B), (b)(2)(F) and (d) to eliminate the references to 
List A reservations.
List B Reservations (Section IV(b)(1)(B))
    The plan participants seek to amend the Symbology Plan to increase 
the number of limited-time symbol reservations (``List B 
reservations'') that a party to the Symbology Plan can reserve from 
1,500 to 2,500 for symbols using one, two or three characters, on the 
one hand, and for symbols using four or five characters, on the other 
hand, in Section IV(b)(1)(B).
    The increase in the number of limited-time symbol reservations is 
necessary given the substantial increase in the number of IPOs and 
other new listings. For example, one data source indicates that the 
number of IPOs was at a 20 year low in 2008 when the Symbology Plan was 
adopted, with 62 IPOs that year. In contrast, in 2020 there were 480 
IPOs, and in 2021 there were 1,058 IPOs, representing a 220% increase 
year-over-year.\8\ Moreover, accompanying this increase in IPOs is a 
significant increase in the number of applications for new company 
listings and in prospects considering a public listing, each of which 
may require a symbol reservation.
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    \8\ See Stock Analysis, IPO Statistics, available at: https://stockanalysis.com/ipos/statistics/ (last accessed January 18, 2022).
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    In addition, an increase in the popularity of SPACs has 
necessitated the reservation of more symbols. Specifically, before a 
SPAC is listed a symbol is reserved for the SPAC while, at the same 
time, plan participants also reserve symbols for the operating 
companies that may eventually become the target of a SPAC. In 2021, 
there were 613 SPAC IPOs, compared to 248 SPAC IPOs in 2020, 
representing a 247% increase.\9\
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    \9\ See Nasdaq, A Record Pace for SPACs in 2021, available at: 
https://www.nasdaq.com/articles/a-record-pace-for-spacs-in-2021.
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    As such, while at the time of the Symbology Plan's adoption in 2008 
it appeared sufficient to allow 1,500 one, two or three character 
reservations, on the one hand, and 1,500 four or five character 
reservations, on the other hand, those limits are no longer appropriate 
given current activity.
    The plan participants also seek to make certain other amendments to 
Section IV(b)(1)(B) of the Symbology Plan in connection with a symbol 
reservation. Specifically, the parties propose to:
    1. Add a new subclause (i) specifying that no party shall make a 
limited-time symbol reservation (``List B reservation'') request with 
respect to a particular symbol unless said party has a reasonable basis 
to believe it will utilize such symbol within the next 24 months.
    2. Add a new subclause (ii) specifying that each List B request 
made by a party for non-exchange traded products must be made in 
connection with the potential listing of a security on such party at 
the request of the issuer (or an agent of the issuer) of such security, 
and the reserving party must confidentially indicate the potential 
listing in the Symbol Reservation System and maintain documentation 
demonstrating that it has a reasonable basis to believe it will utilize 
such symbol for the listing of such security within the next 24 months.
    3. Add a new subclause (iii) specifying that all List B reservation 
requests made by a party for exchange traded products must be made at 
the request of the issuer (or an agent of the issuer) of such security.
    4. Add a new subclause (iv) specifying that the party shall release 
the symbol if it no longer reasonably believes that the issuer will 
list a security using the symbol.
    5. Add a new subclause (v) specifying that a party shall not 
reserve more than one symbol per potential security listing that is not 
an exchange traded product. For the avoidance of doubt, if an issuer 
has multiple potential securities (e.g., an issuer of exchange-traded 
products or an operating company listing several classes of 
securities), the party may reserve multiple symbols at the request of 
the issuer so long as all other requirements set forth in Section 
IV(b)(1)(B) are met.
    A corresponding clarifying change is proposed to Section 
IV(b)(3)(C) to clarify that List B reservation requests must be 
submitted in accordance with subclauses (i) to (v) of Section 
IV(b)(1)(B). The above changes are intended to ensure that each party 
reserves a symbol in connection with a potential listing, and 
confidentially indicates the company's name in the system. In the case 
of exchange-traded products, subclauses (iii) and (v) will allow 
exchanges to reserve multiple symbols at the request of an issuer 
listing multiple potential securities. These issuers commonly issue 
more than one product with different root symbols, unlike corporate 
issuers who rely on the same root symbol even where they have multiple 
classes.
Clarify Provisions That Only Applied to the Original Plan (Sections 
IV(b)(1-3) and (c))
    The participants seek to make certain clarifications in Sections 
IV(b)(1-3) and (c)(1) of the Symbology Plan to update outdated language 
regarding reservations prior to the original effective date of the 
Symbology Plan (November 6, 2008). These changes are intended to 
clarify that certain provisions only applied prior to

[[Page 13029]]

November 6, 2008, and are not applicable thereafter. However, the 
parties would like to retain the outdated language in Section IV(b)(2) 
of the Symbology Plan to provide transparency to any future new 
participants.
Waitlist Provisions
    The parties seek to amend the Symbology Plan to permit an exchange 
to be on the waitlist for a symbol that it has reserved for another 
company. This is intended to address scenarios in which an issuer 
listing on an exchange requests a symbol that another issuer has 
already reserved with the same exchange. For example, if two companies 
request that NYSE reserve the ticker symbol ``ABC,'' NYSE could reserve 
``ABC'' for Company 1 and place itself on the waitlist for ``ABC'' for 
Company 2. If Company 1 no longer wants to use the symbol, NYSE can 
release the symbol to Company 2. These changes are reflected in 
Sections IV(c)(1) and IV(c)(3)).
    Currently, the Symbol Reservation System does not allow an exchange 
to go on the waitlist for a symbol it has already reserved. The 
Processor informed the plan participants that it estimates it will not 
able to begin work on the tech changes required to implement this 
functionality until Q3 of 2022. In the meantime, the particpants [sic] 
propose an interim solution to informally allow a party to go on the 
waitlist with coordination from the other SROs:
    1. NYSE reserves symbol ABC for Company 1.
    2. A week later, NYSE receives a request to reserve symbol ABC for 
Company 2. NYSE emails the plan participants to notify them that NYSE 
has received another request for symbol ABC. The email would include 
the time of the issuer's request, the time of the email, the exchange 
requesting it, and any other information typically included in the 
Symbol Reservation System. An email template is attached [sic] as 
Exhibit B.
    3. The email memorializes that Company 2 is now on the ``waitlist'' 
after Company 1 for symbol ABC. Each plan participant is responsible 
for reading and cataloging this email for its own records.
    4. A few weeks later, Nasdaq goes on the Symbol Reservation System 
waitlist for symbol ABC for Company 3. Company 3 is now on the waitlist 
behind Company 1 and Company 2, according to the email records. 
However, in the Symbol Reservation System, Nasdaq would appear on the 
waitlist (for Company 3) immediately after NYSE (for Company 1).
    5. A month later, Company 1 chooses to release the symbol, and 
Company 2 would like to reserve it. NYSE contacts Nasdaq and asks 
Nasdaq to remove itself from the Symbol Reservation System waitlist for 
Company 3, so that NYSE can go on the waitlist and re-reserve symbol 
ABC for Company 2.
Portability of Symbols (Section IV(f))
    The participants seek to make certain clarifying amendments to 
Section IV(f) of the Symbology Plan to clarify that, as is generally 
consistent with current practice in accordance with the Symbology Plan, 
symbols are reserved for issuers in connection with a specific listing, 
and that those issuers can use a symbol reserved for their listing on 
any national securities exchange, including if an issuer wants to 
transfer to another exchange prior to listing.
    Under the proposed amendment to subsection (1), if an SRO (a ``New 
SRO'') lists a security or product that previously was listed on 
another SRO (a ``Former SRO''), immediately prior to listing on the New 
SRO, the New SRO shall have the rights to that symbol unless, in the 
New SRO's sole discretion, it consents to the symbol being retained by 
the Former SRO, provided however, that such Former SRO shall not reuse 
that symbol to identify a new security or product unless the Former 
SRO, in its sole discretion, reasonably determines that such use would 
not cause investor confusion.
    Under the proposed amendment to subsection (2), if an SRO reserves 
a symbol pursuant to subsection (b)(1)(B) for a specific security or 
product of an issuer, and the issuer of the security or product decides 
to list on a different SRO (the ``Listing SRO'') during the period that 
the reservation is in effect, the Listing SRO shall have the rights to 
that symbol unless, in the Listing SRO's sole discretion, it consents 
to the reserving SRO retaining the symbol on its reservation List B.
Other Amendments
    The participants also seek to make certain clarifying amendments to 
the Symbology Plan to update the names of plan participants in Section 
I(a), update section references in Section IV(d), and correct minor 
typographical errors in Section III and IV(a).

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendment

    The proposed amendment will be implemented upon approval of the 
Commission.

D. Development and Implementation Phases

    Not applicable.

E. Analysis of Impact on Competition

    The amendment does not impose any burden on competition because it 
affects each member of the Symbology Plan in the same way.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    Not applicable.

G. Approval by Sponsors in Accordance With Plan

    Pursuant to Section VIII of the Symbology Plan, each of the 
participants to the Symbology Plan has authorized this amendment.

H. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

J. Method of Determination and Imposition, and Amount of, Fees and 
Charges

    Not applicable.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Regulation NMS Rule 601(a)

A. Equity Securities for Which Transaction Reports Shall Be Required by 
the Plan

    Not applicable.

B. Reporting Requirements

    Not applicable.

C. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

D. Manner of Consolidation

    Not applicable.

E. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable.

F. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

[[Page 13030]]

G. Terms of Access to Transaction Reports

    Not applicable.

H. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The Commission seeks comment on the Amendment. Interested persons 
are invited to submit written data, views, and arguments concerning the 
foregoing, including whether the proposed Amendment is consistent with 
the Act and the rules and regulations thereunder applicable to national 
market system plans. Comments may be submitted by any of the following 
methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number 4-533 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number 4-533. This file number 
should be included on the subject line if email is used. To help the 
Commission process and review your comments more efficiently, please 
use only one method. The Commission will post all comments on the 
Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the Plan that are filed with the Commission, 
and all written communications relating to the Plan between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549 on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
such filing also will be available for inspection and copying at the 
Parties' principal offices. All comments received will be posted 
without change. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number 4-533, 
and should be submitted on or March 29, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(85).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-04834 Filed 3-7-22; 8:45 am]
BILLING CODE 8011-01-P