Monday, October 03, 2005

Data News #2005 - 57
New Display Requirement: Financial Status Indicator

As of February 1, 2006, external market data distributors will be required to provide the Financial Status Indicator on customer display devices and data feed products. This compliance date reflects the six month grace period during which firms are expected to code for the new Financial Status Indicator field in the Issue Symbol Directory message available on NASDAQ® data feed products. NASDAQ first announced this new display requirement on April 12, 2005.

Background

The Financial Status Indicator (FSI) is a data element that NASDAQ added to its data feed products to denote when a NASDAQ-listed issuer had failed to submit its regulatory filings on a timely basis, failed to meet NASDAQ's continuing listing standards, and/or filed for bankruptcy. NASDAQ added the FSI to its data products at the request of the Securities and Exchange Commission (SEC).

Both NASDAQ and the SEC concluded that investors and traders should have access to this important financial status information when making a buying or selling decision. As such, NASDAQ requires that external data distributors provide this indicator to downstream customers. Please see Vendor Alert 2005-021 for additional detailed information regarding the FSI data element.

NASDAQ/UTP Display Requirements

External market data distributors that are subject to the SEC Vendor Display Rule are also required to provide the FSI to downstream customers. Distributors are to include the FSI on data feed products containing NASDAQ quotation and/or last sale information.

To comply with the requirement, market data distributors should add a field to their intraday single security quotation displays showing the FSI. The field should be shown with the issue symbol and/or company name near the top of the quotation display. When the FSI value is published as “N” (Normal), distributors are not required to display any information.

Note, distributors are not required to provide the FSI on voice port devices or cable television services. If a voice port vendor or cable television service offers news information, however, the firm may want to create a news alert based on the FSI value, when the FSI for an issue is not "N" (Normal).

Financial Status Indicator Distribution

The FSI data element is now available on the following NASDAQ products:

Data Feeds
NASDAQ TotalViewSM
NASDAQ Quotation DisseminationServiceSM (NQDSSM)
UTP Quotation Data FeedSM (UQDFSM)
UTP Trade Data FeedSM (UTDFSM)
OTC Montage Data FeedSM (OMDFSM)
Web-Based Product
NASDAQ Issue Symbol Directory
NASDAQ Fundamental Data
NASDAQ Daily List

On the data feed products, NASDAQ distributes the FSI data element within the Issue Symbol Directory (Category A – Type B) message format. The Issue Symbol Directory message is disseminated on the data feeds at 7:00 a.m., Eastern Time (ET), as part of the pre-opening process.

Financial Status Indicator Values

The Financial Status Indicator will be a one byte, alphanumeric field. The allowable values will be as follows:

Code Description
D Deficient: Issuer Failed to Meet NASDAQ Continued Listing Requirements
E Delinquent: Issuer Missed Regulatory Filing Deadline
Q Bankrupt: Issuer Has Filed for Bankruptcy
N Normal (Default): Issue is not currently deficient, delinquent, or bankrupt.
G Deficient and Bankrupt
H Deficient and Delinquent
J Delinquent and Bankrupt
K Deficient, Delinquent, and Bankrupt

For more information on NASDAQ listing requirements, please refer to NASDAQ.com. NASDAQ also publishes a list of delinquent and deficient issuers on NASDAQ.com. Note, NASDAQ now supports both the new Financial Status Indicator and the existing symbol suffixes during a transition period. As of February 1, 2006, NASDAQ will cease the use of the “C”, “E”, and “Q” fifth character modifiers for NASDAQ National Market® and SmallCap securities and rely upon the FSI values to convey this information.

Conclusion

Questions about the Financial Status Indicator should be directed to NASDAQ Market Data Distribution at 301.978.5307 or MKTDATASVC@nasdaq.com.