BILL SEEKS END TO STOCK FRACTIONS : DECIMAL SYSTEM WOULD AID INVESTORS, AUTHORS SAY.

Byline: Marcy Gordon Associated Press 

Seeking to point U.S. stock markets toward the 21st century, House lawmakers unveiled a proposal Thursday to require dollars-and-cents pricing for shares. They said it would save investors money on trading costs.

The securities industry has resisted such a change. But lawmakers of both parties, backed by a key federal regulator, insist it's time to scrap the traditional system of quoting prices in one-eighth increments - which they say fills brokers' pockets at the expense of consumers.

The Toronto Stock Exchange in Canada recently converted to decimal pricing, making the United States the only country whose markets use the fractions. Proponents say adopting decimal pricing would narrow the difference between a stock's best bid and asking prices, known as the spread. Spreads typically vary from 12-1/2 (one-eighth) to 50 cents, an amount that adds up to a sizable profit for brokers, who usually mark up stock prices before selling them to investors.

``It certainly makes common sense for us to go decimal,'' Rep. Michael Oxley, R-Ohio, the bill's primary sponsor, told a news conference. ``We have a chance with this bill to give the small investor his full profit.'' Oxley is chairman of the House Commerce subcommittee on finance.

The American Stock Exchange, meanwhile, approved a proposal to adopt minimum trading increments of one-sixteenth of a dollar (6.25 cents) for all its stocks, saying it would benefit investors. The AMEX was the first U.S. stock exchange to adopt the lower minimum trading increment of one-sixteenth, but spokeswoman Arda Nazerian said the move was unrelated to Thursday's decimal push in Congress and the timing was a coincidence.