SEC Adopts the Decimal

It's official. The Securities and Exchange Commission is now insisting that U.S. stock markets give up their arcane price measurements of 32nds and 64ths and move to decimals.

The SEC is giving the markets a little more than six months to make the change, ordering them Friday to begin quoting stock prices in decimals by July 3.

"Decimal trading will benefit investors by allowing greater competition and making it easier to compare prices," Arthur Levitt, the SEC chairman, said in a statement.

And the commission does not want them to procrastinate. It ordered that markets submit their decimal pricing plans by mid-March.

The plans must include an outline of a six-month "phase-in" period. During the period, markets will be able to price equities and options in price increments of up to 5 cents, but must maintain a pilot program in which a sample of securities trade in increments of a penny.

After the phase-in, exchanges will be required to report to the SEC on the impact that decimal pricing has had on trading, and their preference for a universal pricing increment.

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