Two Numbers Changed in Regulation NMS and Neither One Is Operative Yet

The Tick Size and the Fee Cap Were Both Rewritten in 2024

The text of Regulation NMS that governs how finely a stock can be quoted, and how much an exchange can charge to hit that quote, has already been rewritten. Neither rewrite is operative. That gap between a codified rule and an enforceable one is the practical fact a trader needs, and it is easy to get wrong because the rule text you can look up today reads as though the change is already live.

Two specifics anchor everything below. First, 17 CFR 242.612(b)(2) now assigns a minimum pricing increment of $0.005 to an NMS stock priced at $1.00 or more when that stock's measured spread is $0.015 or less, and $0.01 when the measured spread exceeds $0.015. Second, 17 CFR 242.610(c) now caps access fees at $0.001 per share for quotations priced at $1.00 or more, and at 0.1 percent of the quotation price below $1.00.

Both provisions sit in the Code of Federal Regulations in that form right now. Both are also covered by an exemption. In Release No. 34-105656, dated June 11, 2026, the Commission ordered that it "grants exemptive relief, as set forth in this order, from compliance with Rules 600(b)(89)(i)(F), 610(c), and 612, as amended in the Adopting Release until the first business day of November 2027." The order was issued under section 36(a)(1) of the Exchange Act and Rules 610(f) and 612(d).

So the quoting increment in force today is still one cent for a stock above a dollar, and the access fee cap in force today is still the older figure the adopting release describes as "30 cents per 100 shares ('30 mils' per share)." The new numbers are written down. The old numbers are what fills your order.

Rule 612 Assigns a Tick to a Symbol, Not to a Market

The most common misreading of the half-penny amendment is that the whole tape moves to $0.005. It does not. The rule assigns an increment per symbol, and it reassigns twice a year based on a measured statistic.

The statistic is defined in 242.612(a)(2) as the Time Weighted Average Quoted Spread, meaning "the average dollar value difference between the NBB and NBO during regular trading hours where each instance of a unique NBB and NBO is weighted by the length of time that the quote prevailed as the NBB or NBO." Weighting by duration matters: a one-cent spread that persists all session and a five-cent spread that flickers for two minutes do not contribute equally.

The measurement windows are fixed. Under 242.612(a)(1) the Evaluation Periods are January through March and July through September, and the primary listing exchange performs the measurement. Under 242.612(b)(1) the resulting increment becomes operative on the first business day of May and runs through the last business day of October, or becomes operative on the first business day of November and runs through the last business day of April of the following year.

Two consequences follow directly. A symbol's increment is stale by construction, since a spread measured in September governs quoting through the following April. And a newly listed security has no measurement at all, which is why 242.612(c) assigns $0.01 to any security that becomes an NMS stock during an operative period. Stocks priced below $1.00 are handled separately at $0.0001 under 242.612(b)(3).

The Access Fee Cap Is the Other Half of the Same Trade

A tick size change read on its own is incomplete, because the economics of working an order depend on the tick net of what the venue charges the side that takes liquidity. The 2024 amendments moved both, and the exemption order defers both together.

The adopting release (Release No. 34-101070, published at 89 FR 81773 on October 8, 2024) describes the cap being replaced as 30 mils per share for quotations at $1.00 or more, with 0.3 percent of the quotation price below $1.00. The amended 242.610(c) sets those at $0.001 per share and 0.1 percent respectively.

A derived figure, calculated here rather than published by the Commission. Expressing the cap as a fraction of one minimum increment: 30 mils against a $0.01 tick is 0.003 / 0.01 = 30 percent of one tick. Ten mils against a $0.005 tick is 0.001 / 0.005 = 20 percent of one tick. Ten mils against a $0.01 tick is 10 percent of one tick. The headline cut in the cap is (0.003 - 0.001) / 0.003 = 66.7 percent, but the fee's weight relative to the price grid falls by a third in half-penny names and by two thirds in penny names. Those are different outcomes for the same rule change, and which one a symbol gets depends on the spread measurement described above.

The direction of the fee matters, and it rules out a tempting shortcut. Rule 610(c) is titled "Fees for access to quotations," and it caps what a trading center may charge "for the execution of an order against a protected quotation" — that is, what the side taking liquidity pays. It does not cap a rebate paid to the side that posted the quote. Rule 610(d) is the provision that reaches rebates, requiring that any "fee or fees, or ... any rebate or other remuneration" for the execution of an order in an NMS stock be determinable at the time of execution. Subtracting an access fee from a purely passive fill would put the charge on the wrong side of the trade. The two cases also do not combine. A round trip filled passively on both legs buys at the bid and sells at the offer, capturing the full increment and paying no access fee. A round trip that posts once and takes once transacts both legs at the same displayed price, capturing nothing from the increment and paying the fee once. There is no configuration in which half an increment is captured and one access fee is paid, so any figure built by subtracting a fee from half a tick describes a trade that cannot be constructed.

A Cent and a Half Means Different Things at Different Prices

The $0.015 threshold in 242.612(b)(2) is written in dollars, not in basis points. That single design choice determines which stocks are eligible for a finer grid, and it is worth converting before assuming anything about a particular name.

Derived, calculated for this article. Dividing the threshold by a share price and multiplying by 10,000 gives the threshold in basis points: 0.015 / 5.00 x 10,000 = 30.0 bps at a $5 stock, and 0.015 / 400.00 x 10,000 = 0.375 bps at a $400 stock. The full ladder is charted below. A five dollar stock qualifies for the half-penny grid while quoting a spread eighty times as wide, proportionally, as a four hundred dollar stock must quote to qualify.

Reading the Compliance Calendar Instead of the Commentary

The dates have moved twice, and the sequence is worth holding precisely rather than approximately.

1. The adopting release set a compliance date of November 3, 2025 for Rule 612, Rule 610, and the round lot definition, with the odd-lot information element following on the first business day of May 2026.
2. In October 2025 the Commission issued an exemptive order granting relief from that November 3, 2025 date until the first business day of November 2026 for Rules 600(b)(89)(i)(F), 610(c), and 612, and until the first business day of February 2026 for Rule 610(d), which addresses fees being determinable at the time of execution.
3. In Release No. 34-105656, dated June 11, 2026, the Commission extended the same three provisions to the first business day of November 2027. The order's stated reason was the "competing demands and breadth of other industry-wide market-structure implementation deadlines slated for the balance of 2026."

Derived, calculated for this article. The first business day of November 2027 is Monday, November 1, 2027. From the original November 3, 2025 compliance date to that Monday is 728 calendar days, or roughly 24 months of deferral accumulated across two orders. Anyone who built a spreadsheet against the original date is now two full evaluation cycles away from the rule mattering.

One thing did not move. The round lot definition was not included in either exemption order, and its tiers are live in the current rule text: 100 shares for an average closing price of $250.00 or less, 40 shares from $250.01 to $1,000.00, 10 shares from $1,000.01 to $10,000.00, and 1 share at $10,000.01 or more, with new NMS stocks assigned 100 shares. That is a live change to what counts as a round lot, and therefore to what can set a protected quotation, operating on today's tape while the tick and fee changes wait.

What Would Invalidate This

Two observations would show this framing is wrong. The first is the November 2027 date being handled by amending the compliance date in the rule text itself rather than by a third exemptive order, which would mean the deferral mechanism this article describes is no longer the one in use. The second is withdrawal of the amendments outright rather than deferral of them, which would decouple the tick grid from the access fee cap. The two were adopted in a single release and have moved together at every step so far, and the ratios above assume they continue to.

This is a quoting rule, not a trading rule. Rule 612 governs the increment at which bids, offers, orders, and indications of interest may be displayed or accepted. It does not set the increment at which a trade may print. Executions at finer increments already occur, and reading the half-penny amendment as though it will suddenly permit sub-penny prices misstates what changes.

Nothing here says a spread will narrow. The rule permits a finer grid for qualifying symbols. Whether displayed spreads actually compress, and whether displayed size at the inside thins out as the grid subdivides, is an empirical question that the rule cannot answer in advance. Treat any confident claim in either direction as a hypothesis.

Below a dollar, none of the above applies. Sub-dollar NMS stocks are already on a $0.0001 increment under 242.612(b)(3), and their fee cap is expressed as a percentage of quotation price rather than in mils. The half-penny discussion is irrelevant to them.

Exemption is not repeal, and it is also not a guarantee. An exemptive order defers compliance; the amended text remains in the Code. Equally, a date that has already been extended twice under section 36(a)(1) authority is a date that can be extended again, or overtaken by further rulemaking. Building a plan that depends on November 2027 arriving exactly as scheduled ignores the observable pattern of the last two orders.

Options, futures, and non-NMS instruments are outside the scope entirely. Regulation NMS applies to NMS stocks. Listed options increments are set through exchange rules and pilot programs, not by 242.612.

Concrete Framework

1. Check what is operative before quoting the rule. Look up the section in the Code of Federal Regulations, then search for an exemptive order covering it. As of this writing, 242.610(c) and 242.612 read in their amended form while Release 34-105656 defers compliance to the first business day of November 2027.
2. Separate the tick from the fee. Model the increment and the access fee cap together. A change from 30 percent of a tick to 20 percent of a tick is a different economic event from a change to 10 percent of a tick, and the 66.7 percent headline cut in the cap describes neither on its own.
3. Convert the $0.015 threshold into basis points for the price level you actually trade. Divide 0.015 by the share price and multiply by 10,000. Above roughly $100 the threshold is under 2 bps, which is a demanding test; near $5 it is 30 bps, which is not.
4. Mark the two evaluation windows on a calendar. January through March and July through September are the measurement periods; the first business day of May and the first business day of November are the switch dates. A symbol's assignment is based on a spread measured up to ten months earlier: a July 1 quote sits inside the evaluation period that governs the following April 30.
5. Treat newly listed names as penny-tick by default. 242.612(c) assigns $0.01 to any security becoming an NMS stock mid-period, regardless of how tightly it trades.
6. Do not assume the round lot is 100 shares. The round lot tiers are already operative and step down to 40, 10, and 1 share as average closing price rises. For high-priced names this changes what displayed size at the inside represents.
7. Re-verify the date each quarter. The compliance date has moved twice, by 728 calendar days in total from the original. Re-read the Commission's exemptive orders page rather than relying on a figure carried forward from an earlier note.

All rule citations are to 17 CFR Part 242 as published in the Code of Federal Regulations and to Commission releases. Figures identified as derived are arithmetic performed for this article on published values, not Commission estimates. Nothing here is a recommendation to buy or sell any security.