We learn from The DealFlow Report that the SEC has scheduled a roundtable on the issue of decimalization of stock prices, which may include discussion of possible pilot programs to try different plans to increase "tick sizes" between bid and ask prices in the markets.
The Jumpstart our Business Startups (JOBS) Act required the SEC to study the possible increase of minimum tick sizes. The significant drop in IPOs in recent years is blamed by some in part on the move to penny spreads between prices rather than greater spreads as it had been in the past.
The initial "study" had to be done quickly because of a deadline in the JOBS Act, and the SEC initially said it did not recommend increasing tick sizes but did suggest further study. I guess this roundtable is a movement in that direction, which is good. A pilot program to see what happens makes sense to me.
For additional insights on reverse mergers, SPACs, other alternatives to traditional initial public offerings, the small and microcap markets and the economy, visit the Reverse Merger and SPAC Blog by David N. Feldman, Esq., Partner of Richardson & Patel LLP.
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