May an exchange also accept and round orders in NMS stocks that are explicitly priced in sub-penny increments above $1.00?
No. In this case the orders are impermissible under the Rule, and must be rejected. (See also Question 1 above.) Question 9: A broker-dealer receives an order in an NMS stock priced in an allowable sub-penny increment below $1.00. Market A quotes and trades only in increments of $0.01 even below $1.00, but Market B is willing to accept and represent the order at its actual sub-penny price. Is the broker-dealer obligated to send the order to Market B? Answer: The broker-dealer’s obligation is to act in the best interests of the customer. The Rule does not change that. If the order is marketable, the broker-dealer should try to get the best price reasonably available. If the order is not marketable and must be displayed, the broker-dealer should consider whether the customer is best served by displaying the order to buy at a rounded price at Market A, or at its full sub-penny price at Market B. In making the determination, whether on an order-by-order basis or as a broader policy, the br
Related Questions
- Will market data vendors be permitted to round sub-penny quotations to whole-penny increments in their data displays in NMS stocks for which the Rule permits sub-penny quotations?
- What minimum price increment, if any, will apply to orders, quotations, and indications of interest in stocks other than NMS stocks?
- Does every market trading NMS stocks have to accept sub-penny orders priced less than $1.00?
