If a broker-dealer holds an open order in an NMS stock that must be repriced because of a corporate action (e.g., a stock dividend), may the broker-dealer round the adjusted price to a permissible increment?
Yes. The Rule does not require a broker-dealer to cancel an order that was permissible when accepted, but for which the price must be adjusted due to a corporate action. However, the broker-dealer would violate the Rule by displaying or ranking the repriced order at an increment not permitted by the Rule. The same principle applies to other types of orders that were permissible when accepted but whose prices must be adjusted. For example, an open order accepted before the Rule’s compliance date may be repriced to conform to the requirements of the Rule without canceling the order.
