Symbol, Date Changes Made in Tick-Size Pilot
The names for some of the symbols set to be included in October’s tick pilot program have been changed to reflect new market conditions. Some dates have been changed too.
While there are still two and a half weeks before the actual start of the U.S. Securities and Exchange Commission’s Tick Pilot program, brokers reported that that there are now 398 stocks in Test Group 1, 399 stocks in Test Group 2, 398 stocks in Test Group 3, and 1,198 stocks in the Control Group.
The following 10 symbols will be rolled out on the first day of the pilot, October 3rd: JAKK , ISCA, FET, CFI and SGA for Test Group One. Test Group 2 will be composed of GBT, TTS, HUBS, RATE and ERN.
The rest of the symbols will be rolled out on subsequent Mondays – starting on Monday, October 10, then on the 17th, 24th and 31st.
Also, Nasdaq alerted brokers that symbol TNXP was removed from Test Group 1 and placed in the Control Group because it closed below $1 per share on September 6th.
Pilot stocks closing below $1 are automatically removed from whatever Test Group they’re in and moved into the Control Group.
Each exchange on its website must publish their market quality stats, and all orders received in, the Pilot stocks. FINRA will publish the same data for stocks traded on ATSs but not the venue name of where a stock traded.
Also, each exchange must publish monthly statistics with regards to market making activity in Pilot stocks.
Lastly, registered market makers have to submit details of their profitability regarding Pilot stocks to the exchanges, which in turn will aggregate by test group and publish this data monthly.
The Tick Pilot is designed to collect data and see if trading certain smaller cap stocks at a wider tick increment than a penny can help bolster trading. The actual delivery of the collected data will be made to the SEC on April 2, 2018.
According to note sent to Markets Media from Jay Biancamano, head of equities Americas at Fidessa, the Pilot could cause some traders to avoid the hassle of trading the Pilot stocks, which could reduce liquidity for the very stocks the pilot hopes to stimulate trading in. Also, By adding another layer of complexity, one unintended consequence could be a general rise in trading costs.
“The industry is generally prepared, but needs to be aware that incorrectly entered orders cannot be corrected by brokers and will be rejected,” Biancamano wrote. “This could result in some trading snags when program is implemented.”
The Pilot program is slated to end October 3, 2018.
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