Delay Likely in Stocks’ Decimal Switch
Securities and Exchange Commission Chairman Arthur Levitt said Thursday that regulators probably will delay the planned July 3 switch to decimal stock prices by several months.
Frank Zarb, chairman of the National Assn. of Securities Dealers, which owns Nasdaq, has asked for a delay until early next year, but Levitt recently said the conversion would go ahead as scheduled.
On Thursday, Levitt loosened that stance, though he told Congress he was “dismayed” by Zarb’s request for a postponement. The SEC chairman said he has told NASD executives that investing in technology should be “their principal concern,” ahead of advertising and purchasing buildings. In January, Nasdaq unveiled a $37-million marketing site and TV studio in Manhattan’s Times Square.
Levitt and Congress have pushed for decimals in an effort to narrow trading spreads, the difference between buying and selling prices. Currently, stocks are quoted in fractions, such as sixteenths (or 6.25 cents), although many financial publications already convert them to decimals. The SEC plans to phase in decimals by allowing the markets to use 5-cent increments at first.