Nasdaq to let firms clip tickers
Under the new plan, Microsoft, which now trades as "MSFT," could conceivably adopt the symbol "M" starting in January 2007.
Since the Nasdaq was founded in 1971, the marketplace has used four-letter symbols. Under the new plan, Microsoft, which now trades as "MSFT," could conceivably adopt the symbol "M." In comparison, most companies trading on the New York Stock Exchange are listed under two- and three-letter symbols, while 21 companies, including Ford (F), Kellogg (K) and Citigroup (C), are identified by a single letter.
Nasdaq is responding to a request by the Securities and Exchange Commission that exchanges agree on a uniform approach to distributing ticker symbols. The reason for the switch is to protect U.S. markets in case of a disaster or national emergency, said Bethany Sherman, a Nasdaq spokeswoman.
A more standardized symbol system would help Nasdaq back up the NYSE and American Stock Exchange should they be prevented from conducting business. Nasdaq has the capability to host all 6,700 publicly traded U.S. securities and unlike competitors, doesn't depend on a brick-and-mortar location to host trading.
"We're the backbone of the capital markets," Sherman said.
Another reason for the switch is to allow companies to jump to a different exchange without worrying about losing their ticker symbols. In an e-mail to the stock-trading community, Nasdaq said symbols should be transferable to a competing market.
Adopting a new symbol format will likely impact electronic data-feed and data-capture systems used by brokerages and trading houses. For that reason, Nasdaq is giving itself and customers a year to correct any glitches before implementing the plan.