The Securities and Exchange Commission on Friday announced the agenda for a staff roundtable on Tuesday, February 5 at the SEC's Washington, D.C. headquarters to evaluate the impact of tick sizes on the securities markets.
U.S. stock markets started replacing fractional pricing increments with decimals in 2001, in part to address concerns that the U.S. was at a competitive disadvantage to non-U.S. markets that offered narrower spreads.
Proponents of the change said artificially wide spreads under fractional pricing might benefit market makers at the expense of investors, but industry participants have since raised concerns that tight spreads may be detrimental to small and mid-sized issuers, the SEC said.
The Jumpstart Our Business Startups, or JOBS, Act, which became law on April 5, directed the SEC to study the effects of decimalization on initial public offerings and on issuers with small and mid-sized capitalizations. The SEC staff in a July report to Congress recommended
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