SEC votes to allow half-penny stock pricing

The SEC has approved an update to market rules allowing stock exchanges to price many shares in increments of half a penny, rather than the current minimum size of one cent. Officials say the rule change, to take effect in November 2025, will help lower costs for investors by narrowing bid-ask spreads—the difference between the buying and selling prices of stocks. Bid-ask spreads eat into investors’ gains when they trade in and out of stocks. If the spreads are tighter, investors save money. SEC Chair Gary Gensler said the new rules would promote transparency, fairness and efficiency. “That goes to the heart of the SEC’s mission. The reforms are pro-investors. They are pro-capital formation,” he said in a statement. He also said that “The one-penny minimum has become outdated and too wide for many stocks in today’s markets.” An estimated 1,788 stocks would qualify for the tighter, half-penny ticks based on how they traded last year, according to an analysis released Wednesday by the SEC.