Big Board’s New Dark-Pool Ammo: Sub-Penny Quotes

As Andrew Ackerman from WSJ has reported this morning, The Securities and Exchange Commission on Thursday approved a New York Stock Exchange initiative designed to help it compete better with the so-called dark pools that have taken business away from public exchanges.

The proposal, which aims to lure retail, or individual, investors with more-favorable prices, required the SEC to OK an exemption to market-regulation rules put in place during the past decade. The initiative is expected to be mimicked by other exchanges that have been waiting to see how regulators reacted to the Big Board parent NYSE Euronext’s NYX -0.92% plan.

Under the 12-month pilot initiative, NYSE will become the first U.S. stock exchange allowed to offer retail investors stock quotes in increments of less than one penny. The change puts the exchange on competitive footing with a handful of banks and electronic-trading firms that already pay fees to retail brokers for the chance to fill their clients’ stock orders.

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