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
(HUG)
and
MSC.Software
(MNS)
.
Earlier this month,
Island ECN
, an electronic stock-trading network that applied for exchange status with the SEC, began
trading stocks in decimals.
