The U.S. Securities and Exchange Commission has received two proposed plans from separate groups of stock exchanges for allocating trading symbols.

Historically, symbols have been assigned under an informal understanding among the listing markets. It has been the practice of the New York Stock Exchange to list companies using one-, two- and three-character symbols. Other exchanges, including the American Stock Exchange and regional exchanges, have also listed companies using three-character symbols. Nasdaq has always listed companies using four- and five-character symbols.

In response to dissatisfaction expressed by several markets regarding the informal allocation system, SEC staff asked the exchanges to work together to develop a national market system plan for the process of reserving, selecting, and allocating securities symbols. Following discussions among the exchanges over the past two years, the exchanges recently submitted two competing proposals.

The plan supported by Amex, NYSE and NYSE Arca would limit the use of one-, two- and three-character symbols to those listing markets that traditionally used those symbols. It does not address the use of four- and five-character symbols. The second proposed plan is supported by Nasdaq, NASD, the National Stock Exchange and the Philadelphia Stock Exchange. It would permit any listing market to use one-, two-, three-, four- or five-character symbols.

Nasdaq first announced its intention to begin listing companies with one-, two- and three-character symbols in November 2005. Since that time, it has made a series of announcements detailing its plans, and has worked with the industry to test trading systems to ensure proper functionality for such symbols, including a proposal to allow one company, Delta Financial Corporation, to transfer its listing from Amex to Nasdaq while keeping its three-character symbol.

Additionally, Nasdaq has filed a separate proposal to permit a company in certain circumstances to retain its symbol when transferring its listing to Nasdaq from another stock exchange.

After publishing these plans and proposal for comment the commission will resolve the conflicts over the allocation of stock symbols as fairly and expeditiously as possible.

Erik Sirri, Director of the SEC Division of Market Regulation, said, “Securities symbols are an important part of a listed company’s identity and developing a formal process to reserve, select and allocate symbols among listing markets and their companies will help promote a fair and orderly national market system and prevent investor confusion.”