UPDATE 1-SEC allows Nasdaq to list 3-letter ticker symbols

(Updates with NYSE comment)

NEW YORK, July 10 (Reuters) - The U.S. Securities and Exchange Commission has approved allowing companies that transfer listings to the Nasdaq Stock Market Inc. (NDAQ.O: Quote, Profile, Research, Stock Buzz) from other markets to retain their three-letter ticker symbols.

Markets like the New York Stock Exchange, the American Stock Exchange and other regional exchanges have traditionally used three-character ticker symbols, while Nasdaq-listed securities have four- and five-character symbols.

In its proposal to the SEC, Nasdaq had argued that allowing companies to carry their three-character symbols over to its market would enhance competition and reduce the potential for investor confusion.

The NYSE, owned by NYSE Euronext (NYX.PA: Quote, Profile, Research, Stock Buzz)(NYX.N: Quote, Profile, Research, Stock Buzz), and Nasdaq compete vigorously to win new listings and increase trading volume.

"Ticker symbols are an important distinguishing characteristic for issuers and exchanges," NYSE Euronext spokesman Richard Adamonis said in an e-mailed statement on Tuesday.

"We will continue to assign one-, two- and three-letter symbols to NYSE listed companies to reinforce brand distinction," he said. (Reporting by Anupreeta Das)