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Decimalization involves the Securities and Exchange Commission's call for quotes in increments of pennies versus nickels. The switch was completed at U.S. equity exchanges by Apr. 9, 2001. The transition to decimal pricing was completed at the NYSE on Jan. 29, 2001, while at the NASDAQ it was completed on Apr. 9, 2001.[1]


Some securities industry professionals had been critical of the decimalization plan and the SEC's Apr. 9, 2001 completion target. The National Association of Securities Dealers(NASD), for example, requested that the SEC delay the launch of decimalization for a year, saying its information systems were not ready to handle the increased volume in message traffic that decimalization would generate.[2]

SEC Chairman Arthur Levitt in June of 2000 noted in testimony concerning decimal pricing in the securities and options markets that the convention of quoting stock prices in fractions dated back more than two hundred years. The United States securities markets were the only major markets that didn't price stocks in decimals.

"As the securities markets become more global, with many stocks traded in multiple jurisdictions, the U.S. securities markets need to adopt the international convention of decimal pricing to remain competitive, and the overall benefits of decimal pricing are likely to be significant," he said. "Investors may benefit from lower transaction costs due to narrower spreads. Moreover, the markets will be easier to understand for the average investor," used to dealing in dollars and cents for every-day transactions.[3]