It is not always possible to have complete name of company and so stock exchange allot a symbol that works as identification. In trading language these symbols are known as ticker symbol which is unique and secure.
What is importance of stock symbol and why companies opt to change it?
People who are interested in trading deal with stock symbol. It makes easy to identify companies in stock market and also make to deal easy. There are many times when a company is going through a big decision and it requires to change there stock symbol. Below is some situation when company symbol of company changes in stock market.
- Company collaborated with another company and came as partners will find symbol changed. Now it will be according to new company that came as merger of two.
- There are many companies today who opt for name change and thus in such situation there is need to change symbol of company.
- It is not always possible that companies gain profit and so there are many companies today who even undergoes bankrupt and it needs to change symbol.
- Stock exchanges works on certain rules and so if company is delisted it will need to change symbol.
How National stock exchange goes for symbols?
Symbols given to listed companies in trading market is decided by National stock exchange. It is committee consist of US securities forms who goes for different reports before giving any symbol to company in stock market. This committee goes for securities and oath documents and according to it symbols are given for any listed company. There are different tools used that can help to maintain uniqueness and thus they reserve symbol for a company.
What is ISRA?
One who is trading in stock is aware of symbols but main question is how such symbol are assigned to company. ISRA is responsible for it and they go for selection of symbols according to documents and current condition of company. The main aim of ISRA is to form a system where there is complete transparency and go for different verification. One who participates in NMS plan is required to go through such verification to get symbol for trading market. There is a root symbol that is a unique character to identify stock and thus whole process is carried out by high authorities.
How symbol change can affect a company?
It is a big change for any company as it will lose identification and get new symbol. People who are trading in stock market identify company by its symbol and thus changing symbol will lose identity of company. Here company will face a big difference as people need time to adapt this new symbol and thus it can have negative impact on company. In such time it is very important to come up with some new thing that will help to endorse symbol so that people can identify company. One has to be very sure in every means before any symbol change in stock market. It can even prove positive change for company who is not leading and thus stock listed company must be prepared for every situation while going for stock symbol change.