Deals & MarketsDoes tick size matter? SEC launches review

Does tick size matter? SEC launches review

The US Securities and Exchange Commission (SEC) and the Financial Regulation Authority (FINRA) are exploring the impact that increased tick sizes have on market quality for smaller capitalisation stocks.

The US Securities and Exchange Commission (SEC) and the Financial Regulation Authority (FINRA) are exploring the impact that increased tick sizes have on market quality for smaller capitalisation stocks.

In a 12 month pilot programme, the SEC plans to experiment with widening minimum quoting and trading increments, known as tick sizes, for certain types of stock. These will be limited to those with a market capitalisation of $5 billion or less, a closing share price of at least $2 per share and an average daily trading volume of under one million shares. Pilot securities will be quoted in $0.05 minimum increments, compared to the current tick increment of $0.01 per share.

The Commission plans to monitor how system, which will be rolled out nationally, benefits investors and issuers. The SEC will seek comment on the proposed plan, which will be subject to Commission approval following a 21-day public comment period.

This is an important step for a valuable initiative that could have meaningful implications for market quality,” said SEC Chair Mary Jo White.  “I look forward to the public comment on the proposal and the expeditious development of a final pilot program.”

 

Related Articles

India-US trade corridor: Accelerating growth with reverse factoring

Deals & Markets India-US trade corridor: Accelerating growth with reverse factoring

4m Vinod Parmar
This week in treasury: Top 10 headlines you should know about

Brexit This week in treasury: Top 10 headlines you should know about

9m Victoria Beckett
GTreasury & Visual Risk announce partnership to focus on integrated treasury and new markets

Asia Pacific GTreasury & Visual Risk announce partnership to focus on integrated treasury and new markets

10m Guest Writer
Insurance M&A plunges in H1

Deals & Markets Insurance M&A plunges in H1

12m Victoria Beckett
Tokyo champions free trade through TPP revival

Asia Pacific Tokyo champions free trade through TPP revival

1y Miha Hribernik
Economies set for highest government debt since 2000: Fitch

Deals & Markets Economies set for highest government debt since 2000: Fitch

1y Victoria Beckett
Finastra launches from Misys-D+H union

Deals & Markets Finastra launches from Misys-D+H union

1y Alara Basul
Finastra becomes third-largest fintech company

Deals & Markets Finastra becomes third-largest fintech company

1y GTNews