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Wednesday, October 4, 2006

Data News #2006 - 65
NASDAQ Announces Data Format Modifications for New Stock Symbol Plan

Please Route To:
  • Direct NASDAQ and UTP data feed subscribers
  • NASDAQ market data distributors

Summary:
  • As announced in Head Trader Alert #2006-144, NASDAQ will have the capability to accept and distribute 1-, 2- and 3-character symbols, in addition to the 4-character symbols currently used, effective January 31, 2007.
    • For subordinate issue classes, NASDAQ will adopt the Comstock model for symbol suffixes.
    • To minimize firms’ database and display changes, NASDAQ will limit issue symbol lengths to 6 characters, at least during the initial implementation period.
  • The NASDAQ and UTP data feeds can accommodate the new symbology, with the exception of three legacy data feed products: NASDAQ TotalView (legacy), NASDAQ NOIView and NASDAQ Index Dissemination Service (NIDS). NASDAQ has developed specific plans related to each of these three products.

Background:
As announced in Head Trader Alert #2006-144, effective January 31, 2007, NASDAQ® will have the capability to accept and distribute 1-, 2- and 3-character symbols for NASDAQ-listed and other exchange-listed companies, in addition to the 4-character symbols NASDAQ currently uses. NASDAQ has made the decision to change its stock symbol plan in order to:

  • Enhance market resilience — The technology change to support the new symbology will enable all NASDAQ systems, including the Securities Information Processor (SIP), to support all NYSE- and Amex-listed securities using their original symbols over its core transaction and data platforms. As the U.S. capital markets continue to enhance their redundancy and resiliency, this development is key to NASDAQ’s ability to provide full back-up for other equity markets in the event of a national or local emergency.

  • Promote competition — NASDAQ believes that issuers should have the freedom of choice and competition. As issuers face the important choice of where to list their equities, the symbol an issuer currently uses should not factor prominently in the listing decision process. Similarly, the symbol that a market assigns to an issuer should be transferable to a competing market if that issuer chooses to switch to the competing market.
To accommodate the more flexible symbol lengths, NASDAQ must adjust its handling of subordinate issue classes. While they represent less than 10% of NASDAQ-listed issues, NASDAQ understands the importance of the subordinate issue types within the market data and trading industry. To that end, NASDAQ created an industry working group to address the matter of symbol suffixes for subordinate issue classes. Based on the working group’s recommendation, NASDAQ will adopt the ComStock model for issue suffixes as part of its final symbol plan. To minimize database and display issues, NASDAQ has also agreed to limit its issue symbol length to six characters, at least during the initial implementation period.

Implementation Strategy:
To ensure a smooth transition, NASDAQ plans to implement the new stock symbol system in phases, beginning on January 31, 2007. NASDAQ will publish its conversion schedule for its subordinate issue classes by the end of October. In addition, NASDAQ continues to work with the SEC and other exchanges to develop the Exchange Symbology Plan, which will manage the assignment of symbols across exchanges.

While NASDAQ is planning a phased implementation strategy, NASDAQ will ensure that all of its data feed products are compliant with the new symbology standard by January 31, 2007. While most NASDAQ and UTP data feeds are designed to accommodate flexible issue symbol formats, three data feed products are subject to a 5-character symbol limitation:

  • NASDAQ TotalView® (legacy)
  • NASDAQ NOIViewSM
  • NASDAQ Index Dissemination ServiceSM (NIDSSM)

Plans for the Specified Data Products:
NASDAQ’s strategy varies by data feed:

NASDAQ TotalView (legacy)
As part of its systems integration, NASDAQ is introducing two new versions of its TotalView product offering. The new TotalView-Aggregated and TotalView-ITCH 3.0 data formats are designed to provide greater market transparency at faster processing speeds than the legacy TotalView product. Given the content and processing advantages of the new feeds, NASDAQ is advising all TotalView customers to migrate to the new TotalView-Aggregated or TotalView-ITCH 3.0 data feed as soon as possible.

As outlined in NASDAQ Vendor Alert #2006-049, NASDAQ planned to retire the TotalView legacy data feed formats at the end of 2006. While it has no plans to modify the TotalView legacy formats to accommodate the new symbology, NASDAQ is sensitive to year-end code freezes and other customer migration issues. NASDAQ will, therefore, continue to operate the TotalView legacy formats through January 31, 2007. NASDAQ will also consider data feed extension requests on a firm-by-firm basis. For firms interested in an extension, it should be noted that NASDAQ will only be able to support primary issue classes on the TotalView legacy service after February 1, 2007.

NASDAQ NOIView
NASDAQ NOIView is a filtered data feed product offered by NASDAQ for those market participant firms that are only interested in Net Order Imbalance (NOI) data for the NASDAQ Opening, Closing and IPO Crosses. Since NOIView is based on the TotalView legacy formats, it only supports 5-character issue symbols at this time.

While the TotalView-Aggregated and TotalView-ITCH 3.0 feeds will carry NOI data for the crosses, NASDAQ feels that it is important to offer a filtered data feed option for market participant firms. NASDAQ will, therefore, be modifying the NOIView message formats to extend the issue symbol field size. NASDAQ will release the revised NOIView specifications document shortly and will schedule a hot cut release for January of 2007.

NASDAQ Index Dissemination Service (NIDS)
NIDS is designed primarily to carry valuation data for NASDAQ licensed index and exchange traded fund (ETF) products. NIDS does, however, carry a limited number of equity issue data formats such as the NASDAQ Reference Price and Issue Symbol Participation messages.

The NIDS Reference Price message formats are used to relay NASDAQ Official Opening Price (NOOP) and NASDAQ Official Closing Price (NOCP) data for NASDAQ-listed securities. As outlined in NASDAQ Vendor Alert #2006-062, NASDAQ will retire the NASDAQ Reference Price data formats on November 6, 2006. NASDAQ has already advised NIDS customers to migrate to the UTP Trade Data FeedSM (UTDFSM) as the source for NOOP and NOCP data. Please note that UTDF is already compliant with the new NASDAQ symbol plan.

The NIDS Issue Symbol Participation message is used to relay index weighting data for each component security in a NASDAQ-licensed index product. As outlined in NASDAQ Vendor Alert #2005-020, NASDAQ currently supports two versions of the Issue Symbol Participation message on NIDS. One version of the Issue Symbol Participation format is compliant with the new NASDAQ symbol plan, while the other is not. The Category A — Type V message format is designed to accommodate issue symbols of up to 13 characters in length. To minimize the coding effort on NIDS customers, NASDAQ plans to modify the processing for the Index Issue Symbol Participation to use the Category A — Type V message format for all issue classes including NASDAQ-listed symbols. Once the processing change has been made, NASDAQ will retire the older version (Category A — Type W) of this security weightings message.

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