Investing March 12, 2001

NASDAQ Decimal Pilot Launches

March 12, 2001 (PLANSPONSOR.com) - Despite continued concerns from institutional investors, NASDAQ will launch its first pilot wave of decimal pricing today for 15 securities.
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Institutional investors have expressed concerns that specialists are stepping ahead of large orders ( Money Managers Unhappy with Decimalization ).  Recommendations to deal with that problem have been proposed, and the SEC is reportedly willing to consider them ( NYSE Pushing for “Nickelization” ).  The New York Stock Exchange completed its conversion to decimal pricing for stocks on January 29. 

The Securities and Exchange Commission (SEC) promoted the change to benefit investors by narrowing the spreads inherent in the fraction-based pricing system. 

Plan of Attack

NASDAQ’s plan for conversion to decimals was outlined in the Decimals Implementation Plan For the Equities and Options Markets submitted to the Securities and Exchange Commission on July 24, 2000.

The next scheduled steps in NASDAQ’s decimalization conversion are:

  • March 26, 2001: Second pilot of 177 companies with a total of 199 associated securities begins
  • April 9, 2001: NASDAQ equity securities will be fully converted to decimals.

The initial decimal pilot program will consist of 15 securities (14 NASDAQ and 1 OTC Bulletin Board).  NASDAQ chose stocks for the pilot based on their perceived ability to represent a range of stock trading activities.  The stocks in the pilot, and their tickers, are:

  • Brocade Communications Systems, Inc. (BRCD)
  • Commerce One, Inc. (CMRC)
  • Copper Mountain Networks (CMTN)
  • Cree, Inc. (CREE)
  • Extreme Networks, Inc. (EXTR)
  • Inktomi Corporation (INKT)
  • Integrated Device Technology, Inc. (IDTI)
  • Micromuse, Inc. (MUSE)
  • Newport Corporation (NEWP)
  • OpenWave Systems, Inc. (OPWV)
  • Rambus, Inc. (RMBS)
  • Redback Networks, Inc. (RBAK)
  • Research In Motion, Ltd. (RIMM)
  • VerticalNet, Inc. (VERT)

The OTCBB security is Coastal Caribbean Oil & Minerals, Ltd. (OTCBB Security COCBF).

A list of companies that will be included in the second decimals pilot and other information on decimalization, can be found at the NASDAQ Newsroom at www.nasdaqnews.com (click on Decimalization Q&A).

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