Brokers Smell Trouble Ahead of Attempt to Spur Smallcap Volume
- SEC pilot program for small U.S. stocks begins Oct. 3
- Money managers’ systems aren’t ready, some brokers say
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Several Wall Street executives expect some turbulence when U.S. markets flip the switch on a program aimed at spurring more volume in small stocks.
Starting Oct. 3, about 1,200 small-cap stocks will have a wider “tick size” -- in other words, their prices will be quoted in five-cent increments instead of one cent. The hope is that this two-year test will boost profits for market makers, stimulating volume by luring more middlemen who facilitate trades.