(February 22) – “With less than three weeks to go before the start of the Nasdaq Stock Market’s scheduled switch to decimal pricing, Wall Street is urging a delay, warning of possible “inordinate strain” on the Nasdaq system,” writes Kate Kelly in today’s Wall Street Journal.

“The call for a delay in next month’s scheduled pilot program on Nasdaq is the latest sign of problems in the U.S. markets’ conversion to trading in penny increments, rather than fractions such as 1/16 and 1/8 of a dollar. The New York Stock Exchange was quicker than Nasdaq in making its own decimal switch; it completed the shift for all its stocks Jan. 29. But while the NYSE’s systems have operated fine, that exchange has since been peppered with complaints from traders and institutional investors about the market effects of penny trading, and the exchange has set up a committee to review the situation.”

“Wall Street’s main trade group for professional stock traders, the 7,700-member Security Traders Association, called for the delay to Nasdaq’s switch in a letter sent this week to Laura Unger, the Securities and Exchange Commission’s acting chairman. The association warned that Nasdaq — which, unlike the NYSE, is an electronic dealer market that links many brokerage firms — could be swamped with a doubling of its ‘message and quotation traffic.’ “

” ‘The current plan does not provide enough time to adequately test and assess the many technology and trading issues associated with the conversion,’ wrote the association’s president, Lee Korins, of the current schedule, a three-phase process set to begin with 15 Nasdaq stocks March 12 and finish with the remaining 4,800 or so issues April 9.”

“Judging from the enormous volume of price quotations placed on the Nasdaq — by that standard, it is the world’s largest stock market — Mr. Korins added that the current decimalization plan ‘could place an inordinate strain on a system that has already absorbed enormous volume increases in the past two years.’ “

“Nasdaq, which has acknowledged its struggles with the conversion, says it hasn’t asked for a delay.”