SEC to Hold Roundtable on Impact of Decimalization
Traders Magazine Online News, December 4, 2012
The Securities and Exchange Commission plans to hold a roundtable on February 5 to discuss “the impact of decimal-based stock trading on small- and mid-sized companies,” as well as securities markets in general.
The roundtable, to be held at SEC headquarters in Washington, D.C., is an outgrowth of a Report to Congress on Decimalization issued in July.
That report, in part, looked at whether the penny spread between bid and offer prices on stocks that is engendered by decimalization is too narrow to incent market participants to bring smaller companies’ stock onto public markets or to promote the shares when there.
The staff report indicated that a pilot test might be conducted on a larger tick size for the securities of smaller companies, to see if that would lead to greater trading of their shares and result in more smaller capitalization companies going public.
U.S. stock markets adopted decimal pricing increments in place of fractions in 2001. Other countries have multiple tick sizes, but the United States has kept a single-size regime in place.
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