SEC Approves Half-Penny Stock Pricing to Enhance Market Competition

The new rules, aimed at reducing transaction costs and promoting fairer pricing, will take effect in November 2025.

The SEC unanimously voted to allow exchanges to quote stock prices in half-penny increments, down from the current one-cent minimum.
This change affects approximately 2,400 securities, including many large-cap stocks and ETFs, aiming to narrow bid-ask spreads and lower trading costs.
The rule also caps access fees that exchanges can charge brokers, addressing concerns about price distortions and promoting fairer market access.
The decision follows industry debates and responses to the 2021 GameStop trading frenzy, highlighting the dominance of off-exchange trading.
Market participants have expressed mixed reactions, with some fearing reduced liquidity and others welcoming the potential for increased competition.