Delay Sought in Move to Decimal Stock Prices
National Assn. of Securities Dealers Chairman Frank Zarb asked the Securities and Exchange Commission on Tuesday to delay the start of a move to decimal stock prices until the first quarter of next year.
The SEC has been planning to phase in use of decimals on the U.S. securities markets between July and October. Currently, stocks are quoted in fractions, most often sixteenths.
“We believe the shift to begin trading in decimals this year would impose unacceptable risks,” Zarb said in a letter to SEC Chairman Arthur Levitt.
The capacity of Nasdaq’s trading systems might be strained by the extra quote and message traffic expected under dollar-and-cents increments, Zarb contends. Nasdaq share volume already has more than doubled since 1998, and quote-message traffic has almost quadrupled during that time, Nasdaq data show.
An SEC spokesman declined to comment. Levitt and Congress have pushed for decimals to try to narrow trading spreads, the difference between buying and selling prices.
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