Exchange operators seek subpenny trading in some securities

05/3/2010 | Bloomberg

Nasdaq OMX Group, NYSE Euronext and Bats Global Markets last week sent a letter to the Securities and Exchange Commission requesting a pilot program to trade 30 securities in half-cent price increments. The move is an attempt to lure business from dark pools and other private venues. "The current quotation regime creates artificially wide public reference prices for some low-priced and liquid securities, driving some price discovery into dark markets," Nasdaq said in a separate letter. "Maintaining a one-penny increment by regulation can increase costs for investors when the spread would otherwise decline below one penny."

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