E: What It Means, How It Works, Example

What Was E?

"E" was a temporary character suffix added to stock symbols traded on the Nasdaq exchange, which indicated that the issuer of the stock was delinquent in regulatory filings. The "E" suffix was only used for Over-the-Counter Bulletin Board (OTCBB) issues.

The Nasdaq replaced the "E" suffix with the Financial Status Indicator (FSI) in 2005 and required that all data providers be compliant by Feb. 1, 2006. The FSI required financial data feeds to show customers when a company had failed to submit regulatory filings on time.

Understanding E

"E" and "Q" (for bankruptcy situations) were stock symbol suffixes used for many years. The Nasdaq considered expanding the temporary suffix for all listing deficiencies, however, the Nasdaq decided against it because of complaints received over the years from traders and investors that the symbol changes made it difficult to track the trading history for a given security.

The Nasdaq replaced the symbol suffixes with the Financial Status Indicator Field in order to ensure that market players had access to both financial status information and the trading history for a given security.

Nasdaq data distributors are now required to show customers an FSI data box if the symbol being viewed is delinquent in submitting regulatory filings. Most data vendors do not show the FSI data box if the company is current or normal in their filings. In other words, if the company is current in their filings, an alert is not shown. If the company of the stock symbol is delinquent, an alert should be shown near the top of the display and should not be hidden from the viewer.

For example, if a company has not submitted required documents, this could affect the listing of the security on the exchange or result in other problems for the company. In such a case, if that stock symbol is listed on the Nasdaq, the exchange requires that data vendors show viewers that the financial status of the company is not normal by way of the FSI data box.

Data vendors are companies that provide stock quotes to customers, such as when a stock quote is looked up on a website or through an online broker. If the website is showing delayed data, the warning may not show. Also, some websites that are simply republishing price data from another site may not show the warning, since data vendors that provide real-time data will show it instead.

The FSI display requirement does not apply to voice or television services. For example, if a cable television show is discussing a stock then they don't need to provide the FSI data if the company has failed to submit filings, although they should provide an alert or let the viewers know.

Example of an FSI Warning in a Stock

The FSI indicator replaced suffixes being added to stock symbols, but the letters, such as E, still remain and are often included in the FSI warning. The following screenshot shows an example of a company that is delinquent (E) in regulatory filings and deficient in list requirements (D). If a company is both delinquent and deficient, it is given a code H. This "H" is shown in the warning next to "Nasdaq FSI," in this case.

The warning is simply meant to alert investors that the company has not met a required listing standard. It should not be viewed, necessarily, as an indication to buy or sell. The warning is information that the investor can use at their discretion.

The Nasdaq produces a daily noncompliant company list, which is available for free, and lists all the companies that are not meeting listing standards. A stock/company is added to the list typically five business days after the company is notified of the issue. The company is removed from the list one business day after they remedy the issue or they are delisted.