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Securities Pricing.

Securities and Exchange Commission (SEC) Release No. 34-42360 directs the securities markets to begin quoting securities prices in decimals by July 3, 2000. The order required (1) the markets to submit a decimals pricing implementation plan by March 13, 2000 and (2) the options and equities markets to phase in decimal pricing by year-end. During the phase-in period, the markets can quote equity securities in price increments of up to five cents.

The markets must also create and conduct a pilot program during the phase-in period, in which a sample of securities will be quoted in one-cent increments.

At the end of the six-month phase-in period, the markets must submit a study to the SEC on the effect of decimal pricing on trading and capacity. The study should also address whether a uniform pricing increment is needed and, if so, what the increment should be. Absent further SEC action, after submission of the study, each market is required to submit for SEC consideration any rule changes necessary to implement their choice of pricing increment.

The markets affected include the following:

* American Stock Exchange LLC (AMEX).

* Boston Stock Exchange, Inc. (BSE).

* Chicago Board Options Exchange, Inc. (CBOE).

* Chicago Stock Exchange, Inc. (CHX).

* Cincinnati Stock Exchange, Inc.

* National Association of Securities Dealers, Inc. (NASD).

* New York Stock Exchange, Inc. (NYSE).

* Pacific Exchange, Inc. (PCX).

* Philadelphia Stock Exchange, Inc. (PHLX).
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Publication:The Tax Adviser
Date:Apr 1, 2000
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