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To: Don Green who wrote (42777)	3/11/2000 9:04:00 PM
From: Les H	Respond to of 99985

SEC Won't Extend Decimal Stock Date for Nasdaq Updated 7:12 PM ET March 10, 2000 By MARCY GORDON, AP Business Writer WASHINGTON (AP) - Federal regulators said Friday they will not extend their July 3 deadline for U.S. stock exchanges to begin trading stocks in decimals, despite a request for a delay by the brokers' group that operates the Nasdaq Stock Market. The group, the National Association of Securities Dealers, told the Securities and Exchange Commission this week that its computer systems aren't ready to handle a switch to decimals. The NASD asked for a delay until next year. The NASD request also threw into question the timing of a move to decimals by the rival New York Stock Exchange, since the two biggest exchanges likely would coordinate their conversions. In January, the SEC ordered the nation's stock exchanges to begin quoting at least some share prices in dollars and cents by July 3, requiring them to fully abandon the 200-year-old use of fractions by year's end. Under the SEC's plan, some stocks are to begin trading in 5-cent increments, with many possibly trading in penny increments by the end of the year. "At this point, the (SEC) has not extended the July 3, 2000, date for implementing decimal prices," the agency said in a statement issued Friday. The SEC said it is discussing with the stock exchanges "how to implement decimals in a way and in a timeframe that does not threaten the well-earned confidence that U.S. investors have placed in our markets." The SEC did give the securities industry an extra month, until April 14, to submit its plan for phasing in decimal trading. The exchanges also were given another month, until April 28, to file their proposals. Nasdaq spokesman Scott Peterson suggested that the SEC might decide to extend the deadline after reviewing the industry's plans. "I don't think that anyone is going to force us to meet a deadline that we have clearly stated we're not ready for," he said. "That wouldn't make sense." Ray Pellecchia, a spokesman for the New York Stock Exchange, reiterated the NYSE's declaration that it is ready to start switching to decimals by July 3. He declined further comment. "The imperative is that we do it right and we do it well," said James Spellman, a spokesman for the Securities Industry Association, which supports the NASD's request for a delay. In a report released last week, congressional investigators said Nasdaq could have technical problems preparing its computer systems for the increased volume of stock quotes from decimal trading. So far this year, Nasdaq has experienced several days in which more than 2 billion shares were traded. Nasdaq had said in January it would be ready to trade in 5-cent increments on July 3. As an interim step, Nasdaq, the NYSE and some regional exchanges have been quoting stocks in minimum increments of one-sixteenth of a dollar, instead of the customary one-eighths. In decimals, a sixteenth is 6.25 cents and an eighth is 12.5 cents. Supporters say adopting the decimal system would narrow the difference between a stock's best bid and asking prices, known as the spread. Spreads typically vary from 12 1/2 cents to 50 cents, an amount that adds up to a sizable profit for brokers, who take in a percentage based on the size of the spread. Proponents of decimalization argue that a narrower spread will increase the competitiveness and efficiency of markets, increase trading volume and improve liquidity. By contrast, critics say the narrower spreads in decimal trading would erode profits, something that could reduce the number of market makers, the firms which form a market's backbone.