Section 106(b) of the JOBS Act requires that the SEC conduct a study examining the transition to trading and quoting securities in one penny increments, also known as decimalization. Among other things the study is to examine the impact that decimalization has had on the number of initial public offerings since its implementation relative to the period before its implementation.
The JOBS Act also provides that if the SEC determines that the securities of emerging growth companies should be quoted and traded using a minimum increment of greater than $0.01, the Commission may, by rule not later than 180 days after the date of enactment of the JOBS Act, designate a minimum increment for the securities of emerging growth companies that is greater than $0.01 but less than $0.10 for use in all quoting and trading of securities in any exchange or other execution venue.
The SEC staff recently completed the decimalization study. In it the staff recommends that the SEC should not proceed with the specific rulemaking to increase tick sizes, as provided for in Section 106(b) of the JOBS Act, but should consider additional steps that may be needed to determine whether rulemaking should be undertaken in the future.
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