(March 7 – 10:50 ET) – The National Association of Securities Dealers is asking the Securities and Exchange Commission to delay the decimalization of the U.S.
securities markets until 2001.
The SEC has slated July 3, 2000 as the deadline for decimalization. The NASD contends that it should be put off until next year because recent heavy increases in trading volume is causing concern about the impact of transition.
In a letter to SEC chairman Arthur Levitt, Frank Zarb, chairman and CEO of the NASD pledges his support for decimalization as a way to make markets more accessible and
efficient. However, he argues, in light of the explosion of transaction volume and quotations levels in both the equity and options markets “we believe the shift to begin trading in decimals this year would imposee unacceptable risks.”
Zarb admits that the Nasdaq just isn’t ready to make the move. “The prudent thing to do is to implement decimals when we know we are ready. We are not there yet,” he says. Since 1998, Nasdaq share volume per day has more than doubled and Nasdaq quote message traffic has more than tripled.
Zarb says the NASD wants to “do this right” and he suggests that the SEC seek comments about industry readiness. The Decimalization Steering Committee of the Securities Industry Association says it “fully supports” the NASD’s request.
-IE Staff