Quoting stock prices at increments of less than a penny would be banned under a basket of market reforms being considered by regulators, a source familiar with the matter said Tuesday.
As regulators tackle a major retooling of the United States' intricate and aging national market system, a sub-penny pricing ban was said to be under internal review at the Securities and Exchange Commission, along with several other reforms.
Sub-penny quotes have spread since markets in the United States joined the rest of the world about two years ago in expressing stock prices to the penny instead of fractionally in 16ths.
Although decimalization has saved investors money by reducing spreads, some markets have taken it further by expressing prices beyond the second decimal place. That is slicing traders' profit margins razor thin and making limit orders harder to fill, critics say.
