Beginning on December 1, 2008, the New York Stock Exchange will accept and no longer reject orders priced less than $1 that are entered in sub-pennies for all securities listed on both the NYSE and NYSE Alternext. The Exchange will round limit orders to the nearest next whole penny, either down for buy orders or up for sell orders, to represent the order for execution or to transmit the bid or offer to the Consolidated Quote System using the rounded limit price. Please refer to the two attached links for additional technical details and for the SEC Rule filing.
Additionally, at a date to be announced shortly, the Exchange systems will also begin passing back reports to clients in sub-pennies, with a maximum of a four decimal place increment for executions that are received from away market centers.
NYSE Rule File # SR-NYSE-2008-123
NYSE Sub-Penny Order Technical Specifications
In a Phase II approach to sub-penny trading, currently slated for an early 2009 introduction, the Exchange will continue to accept limit orders for sub $1 priced securities in four decimal places without truncating the last two places of the orders limit. When this functionality is introduced, Exchange Systems will transmit client orders to the Consolidated Quote System as they were originally placed, for up to four decimal places. The Exchange plans on releasing an additional client communication message highlighting further details closer to the roll out date of this phase II approach.
Category: Operations, Securities
