FRAMINGHAM (03/08/2000) - The National Association of Securities Dealers Inc., the parent company of the Nasdaq Stock Market Inc., has asked the Securities and Exchange Commission (SEC) to put off its plans to shift the nation's securities markets to decimal-based pricing until 2001 to help it and other entities increase their systems capacity to handle an expected increase in message and order traffic.
In a March 6 letter sent to SEC Chairman Arthur Levitt, NASD Chairman and CEO Frank G. Zarb asked him to consider postponing the security industry's planned switch to pricing stocks in decimals instead of fractions, which was slated to begin July 3, because such a move so soon "would impose unacceptable risks" to the market.
Nasdaq's quote message traffic has more than tripled since 1998 with fraction-based stock prices. In a hearing before a subcommittee of the House Commerce Committee last week, the U.S. General Accounting Office predicted that Nasdaq would witness a 700 percent surge in quote and trade message traffic between December 1998 and December 2001 if it were to shift to decimalized stock pricing beginning in July (see story).
A spokesman for the SEC said the agency has received the letter from NASD and "has no response at this time."