Securities Pricing: Actions Needed for Conversion to Decimals
T-GGD-98-121
Published: May 08, 1998. Publicly Released: May 08, 1998.
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Highlights
GAO discussed the results of its assessment of the securities industry's readiness to trade stock using decimal prices.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| United States Securities and Exchange Commission | To help ensure a successful implementation of decimal trading in U.S. equities markets as soon as possible after January 1, 2000, the Chairman, SEC, should ensure that market participants develop a comprehensive plan for implementing decimal trading. Such a plan should: (1) establish interim milestones, including those associated with streetwide testing; (2) set an implementation target date; and (3) delineate technical standards and specifications that receive broad industry support. Although the Securities Industry Association has agreed to oversee and manage the project as it has done for year 2000, SEC should monitor the plan's implementation. |
Closed – Implemented
In letters to Congress and GAO responding to the recommendations, SEC agreed to monitor the progress of the securities industry toward implementing decimal trading. To facilitate the development of the plan, SEC directed the NYSE to convene a small working group of equity and derivatives markets participants. The group is composed of representatives of SROs and securities firms. This group has developed a set of preliminary technical standards for decimal trading and a proposed testing and implementation schedule.
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| United States Securities and Exchange Commission | To help ensure a successful implementation of decimal trading in U.S. equities markets as soon as possible after January 1, 2000, the Chairman, SEC, should ensure that an assessment is conducted of the potential impact of decimal trading on the: (1) industry's processing and communication capacity; and (2) functioning of market regulations and exchange rules so that any necessary changes can be made and a smooth transition to decimal trading can occur. |
Closed – Implemented
In its letters to the various congressional committees and GAO, SEC noted that the Securities Industry Association and the New York Stock Exchange are organizing an industrywide capacity study to determine if decimal trading will require additional systems capacity, and SEC has agreed to monitor the progress of this effort. SEC has also directed the self-regulatory organizations to conduct a review of the rules affected by decimal trading and to report their findings by October 1998.
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Topics
Software verification and validationInformation resources managementProposed legislationSecuritiesSecurities regulationStock exchangesStrategic information systems planningSystems conversionsY2KSecurities firms