Washington, D.C. – The Government Accountability Office (GAO) report released today concerning the effects of decimalization on U.S. securities markets verifies that the move is improving the efficiency of the markets, according to U.S. Senator Mike Enzi, R-Wyo.
As a member of the Senate Banking Committee and former Chairman of the Senate Securities and Investment Subcommittee, Enzi held some of the first hearings on the modernization of the nation’s securities markets, including decimalization, the switch from fraction pricing to penny pricing for securities. The GAO report, requested by Senator Enzi and Senator Rick Santorum, R-Pa., is considered the first comprehensive study on the effects of decimalization since its adoption in 2001 and confirms it is producing many of the desired effects forecasted by the Securities and Exchange Commission.
“The effect of decimalization on our nation’s securities markets has been beneficial. The switch to penny pricing was an essential step to keep our markets competitive, to lower trading costs and to make investments easier to understand for the individual, retail customer. The findings in this report show that decimalization has helped to achieve these goals,” said Enzi.
There has been some consolidation in the markets and in some cases less transparency, which may in part be due to decimalization with large block stock sales.
Enzi said it’s important to monitor these trends, especially the impact they have on small businesses.
“As our national market system continues to advance, we must ensure that smaller companies can still access public capital through our nation’s markets. This way, our economy can continue to grow and compete in any market across the globe and remain the financial leader of the world,” said Enzi.