MFDF - Mutual Fund Directors Forum - SEC Orders Tick Size Pilot Program test

Member Login

Request an account

Sample Banner 2

SEC Orders Tick Size Pilot Program

The SEC recently ordered the national securities exchanges and FINRA to develop a pilot program designed to study the effect of widening quote and trading limitations for certain small and mid-capitalization companies.  The SEC ordered the pilot program to “facilitate studies of the effect of tick size on liquidity, execution quality, volatility, market maker profitability, competition, transparency, and institutional ownership.”  The tick size pilot plan will last for one year and apply to common stocks with market capitalizations of $5 billion or less, an average daily trading volume of no more than one million shares, and a share price of at least $2.  The program will consist of one control group and three test groups of 300 securities each.  The control group will continue to be quoted at the current one cent tick size and traded at current increments, while the test groups will include:

  • Quoted in five cent increments and traded at any current permissible price increment
  • Quoted in five cent increments and traded in five cent increments with certain exceptions and
  • Quoted in five cent increments and traded in five cent increments and subject to a trade at requirement.

Data will be collected by the exchanges and shared with both the SEC and the public.  The order also includes a requirement that the exchanges and FINRA provide the SEC with an assessment of the program at the end of the pilot period. 

The exchanges and FINRA are to submit a plan with the details of the program by August 24, 2014.


  • All
  • Accounting and Audit
  • Advisory Contracts
  • Board Governance
  • Board Governance: Board Leadership
  • Board Governance: Compensation
  • Board Governance: Oversight of CCO
  • Board Governance: D&O Insurance
  • Board Governance: Self-Evaluation
  • Closed-end Funds
  • ETFs
  • Other Oversight
  • Other Oversight: Alternative Investments and Derivatives
  • Other Oversight: Custody
  • Other Oversight: Fixed Income funds
  • Other Oversight: Distribution
  • Other Oversight: Portfolio Trading
  • Other Oversight: Proxy Voting
  • Other Oversight: Securities Lending
  • Legislative News
  • Money Market Funds
  • Reference
  • Regulatory News
  • Risk
  • Shareholder Disclosure
  • Valuation
  • Webinars
  • Aaron New Tag