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00-67 Decimalization Implementation Plan

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INFORMATIONAL

Decimalization

SUGGESTED ROUTING

KEY TOPICS

Legal & Compliance
Operations
Options
Registered Representatives
Senior Management
Technology
Trading & Market Making

Decimalization



Executive Summary

In response to the request1 from the Securities and Exchange Commission (SEC) for a plan on the implementation of decimals trading, the National Association of Securities Dealers, Inc. (NASD®) and the exchanges submitted a plan on July 24, 2000. A summary of the critical dates is provided in this Notice to Members.

Questions/Further Information

Questions regarding this Notice to Members may be directed to the ASD Decimalization Program Management Office (DPMO) toll free at: (888) 227-1330, or via e-mail at decimals@nasd.com.

For the most recent decimalization news and developments, visit the NASD Web Site (www.nasd.com) and click on the decimalization link. Additional decimalization information is available on the Securities Industry Association's (SIA) Web Site (www.sia.com).

First Phase Of Decimalization

Please note, on August 28, 2000, the securities industry successfully implemented the first phase in the move to decimalization by trading 13 issues and their related options in decimals. Initial reports have stated that the trading in these issues ran smoothly and volume and spreads on the issues were all within a normal range.

NASD & Exchanges' Decimalization Implementation Plan

On July 24, 2000, the NASD and the exchanges submitted a comprehensive phase-in plan for decimal pricing in equity securities and options. Details of the plan are shown in the table below:

Checkpoint/Phase Action Date
Checkpoint I Pre-Implementation Evaluation August 15, 2000
Phase I Limited Exchange-Listed Issues and Options August 28, 2000
Checkpoint II Determine Readiness for Additional Exchange-Listed Issues and Options September 19, 2000
Phase IIA Additional Exchange-Listed Issues and Options September 25, 2000
Checkpoint III Determine Readiness for Full Implementation of Exchange-Listed Issues and/or All Options November 1, 2000
Phase IIB Full Conversion Exchange-Listed Issues and/or All Options November 2000 - April 2001
Checkpoint IV Limited Nasdaq Issues March 5, 2001
Phase III Limited Nasdaq Issues On or before March 12, 2001
Checkpoint V Determine Readiness for All Markets, Full Implementation April 2, 2001
Phase IV All Markets, Full Implementation On or before April 9, 2001

To view the complete plan, visit the SEC Web Site (www.sec.gov/rules/othern/decimalp.htm). The SEC has not given final approval to the plan.


Endnote

1Release No. 34-42914 (June 8, 2000), 65 Fed. Reg. 38010 (June 19, 2000).


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