NYSE Submits Plan to SEC for Decimal Pricing

The pilot program calls for the pricing of seven selected stocks to begin on Aug. 28.

Author:: Steven Vames
Publish date:: Jul 25, 2000 7:00 PM EDT

The pilot program calls for the pricing of seven selected stocks to begin on Aug. 28.

The

New York Stock Exchange

submitted plans to the

Securities and Exchange Commission

Tuesday to begin a pilot program on Aug. 28, under which it will start pricing seven individual stocks in decimals.

The move comes after the SEC, which

mandated in late January a strict timeline for the shift to decimal pricing. But it later eased its position,

leaving the timeline for the switchup to the NYSE and the

Nasdaq

stock market. That move reversed the SEC's earlier plan, which called for a switch on July 3. The rapid switch was dropped after the Nadaq's parent, the

National Association of Securities Dealers

, said its computer systems would not be ready for it.

The SEC is now only requiring that all securities trade in decimals by April 9, 2001.

The SEC's push for markets to price their stocks in decimals is aimed at narrowing the spread -- the difference between offers to buy and sell -- on stocks, making for more accurate and efficient markets.

Congress

has said that the change could eventually save investors as much as $3 million per trading day.

NYSE, the nation's largest stock market, says it will begin listing the seven stocks in increments of a penny, rather than the conventional increments of 1/16, or 6.25 cents, on Aug. 28, pending SEC approval. About 60 days after that, the exchange says it will work with the securities industry to evaluate the pilot program and set new goals to meet the April 2000 deadline.

The stocks to initially begin trading in decimals on Aug. 28 are:

Anadarko Petroleum

(APC) - Get Report

Forest City Enterprises class A shares

(FCE.A, NYSE),

Forest City Enterprises class B shares

(FCE.B NYSE),

FedEx

(FDX) - Get Report

Gateway

(GTW)

Hughes Supply