News Release

NASD Seeks Public and Industry Comment on Decimalization

Washington, D.C.--The National Association of Securities Dealers, Inc., (NASD), formally requested comment today from investors, securities industry representatives, Nasdaq-listed companies, and other interested market participants on the impact that decimal pricing could have on investors and others. A copy of the request for comment, in its entirety, is available on the NASD Investor Services Web site, under "Notices". Comments must be sent to the NASD by July 15, 1997, for review and analysis.

The NASD will use these public and industry comments in conjunction with its comprehensive study of decimal pricing. The study will review and interpret academic research and other relevant literature on the topic; study other markets that use decimal, rather than fractional, pricing; and analyze the technological impact that a switch to decimalization would have on Nasdaq trading and regulatory systems.

To study the topic of decimalization thoroughly and fairly, the NASD is seeking views from the widest possible range of constituents on the potential benefits and costs that could be related to a conversion from fractions to decimals.

"As part of our recent initiatives to protect investors, we are seeking input from all of our constituents. If the review demonstrates that decimal pricing aids investors in the purchase and sale of stocks, then we will do whatever is necessary to make it happen," said Frank Zarb, Chairman, CEO and President of the NASD.

To benefit investors, Nasdaq has already narrowed its quotation increments from 1/8 of a dollar (12.5 cents) to 1/16 of a dollar (6.25 cents) for Nasdaq-listed securities with bid prices of $10 or above. Following swift approval by the SEC, the new quoting system was implemented on June 2. The narrower quoting increments are intended to improve the transparency of the market, provide investors with an opportunity to receive better execution prices, and facilitate greater quote competition and narrower spreads. "Investors are our number one priority, and whatever we do will be in their best interest. We began quoting in narrower increments of 1/16ths on Monday, June 2, which we believe will help investors trim trading costs," Zarb said.

NASD officials testified before Congress on April 16, 1997, at a hearing on proposed legislation called the Common Cents Stock Pricing Act of 1997 (H.R. 1053) and agreed to provide the results of its study to the Congressional Committee considering this bill.

To help sharpen the focus of comments, the NASD requests that commenters provide responses to a series of question. The NASD is requesting comment on the positive and/or negative effects of decimal pricing; technology costs to brokers and vendors; regulatory impact; the effect on market quality; and questions on implementation of decimal pricing.

The National Association of Securities Dealers is the largest securities-industry self- regulatory organization in the United States. Through its subsidiaries, NASD Regulation, Inc., and The Nasdaq Stock Market, Inc., the NASD develops rules and regulations, conduct regulatory reviews of members' business activities, disciplines violators, and designs, operates, and regulates securities markets and services all for the ultimate benefit and protection of the investor.