Round-Lots, Odd-Lots Push Forward, while SEC Delays Tick Size and Access Fees

Equity market structure is back on the agenda, with multiple rules in motion and delays in certain compliance dates. Yesterday, the redefinition of round-lot sizes and the change for the securities information processors (SIPs) to disseminate size in shares went live – a move that modernizes market data infrastructure and increases transparency for retail investors. However, the SEC issued an exemptive order on October 31 that delays the compliance deadline for Regulation NMS tick-size and access-fee rules – from Nov. 3, 2025, until November 2026. This means that market participants and exchanges will have another year in which to comply with the tick size and access fee rules.

Citing the lapse in appropriations due to the government shutdown, the SEC also said that a decision by US court of appeals denying a petition (by exchanges) to review the amended rules, (which will end the SEC’s partial stay), had created uncertainty over the compliance deadlines and concerns over whether market participants could comply.

“In light of recent events, exemptive relief from the Nov. 3, 2025 compliance date is necessary to facilitate orderly market functions,” stated SEC Chair Paul Atkins. In addition, the SEC extended the implementation date for exchanges on fees to be determined at the point of execution from December until February 2026.

Despite these delays, the SEC implemented the new round-lot sizes based on price tiers and the change for the SIPs to disseminate size in shares, (instead of number of round lots). Dissemination of odd-lot quotes from each exchange to the consolidated tape is scheduled for May 1, 2026. The changes will transform the way that stocks are quoted, traded and displayed. Instead of a fixed trading round lot size of 100 shares, the SEC is shifting to a more flexible approach based on stock price: 100 shares, 40 shares, 10 shares, or 1 share.

Each national market system (NMS) stock will be assigned a round lot size, semiannually, based on the stock’s average closing price on the primary listing exchange during a one-month evaluation period.

Stocks priced between $250.01 and $1,000 will have a round-lot size of 40 shares, stocks priced between $1,000.01 and $10,000 will have a round lot of 10 shares, while those priced above $10,000 will have a round-lot size of just one share.

Round-Lot Tiers

The tiered system recognizes that retail investors cannot afford to trade 100 shares of higher-priced stocks – such as Alphabet, Netflix, and Meta Platforms – and that there is a trend toward trading in smaller quantities or notional amounts to buy or sell fractional shares.   

The change also reflects the fact that in today’s automated market, odd-lot trading and higher-priced stocks dominate, with odd lots accounting for 70% of the market, up from 20% in 2005.

“Markets have boomed and there are many higher-priced stocks. Companies split their stocks a lot less frequently than before and we see a lot more reverse splits than forward splits,” said  James Angel, finance professor at Georgetown University.

According to Angel, since the changes only affect stocks above $250 a share, it only affects “a handful of stocks; most stocks are unaffected.” In September, Nasdaq estimated that the new round-lot tiers will affect over 200 stocks, but about 4,700 stocks will see no change.

Odd Lots Come into View

Up until now, odd-lot quotes – for less than 100 shares – have been excluded from the consolidated tape and the National Best Bid and Offer (NBBO). This means retail investors lack visibility into odd-lot quotes. In addition, there can be better-priced odd lot orders further down the order book of an exchange, but they are not “protected quotes” under Regulation NMS.

Under the Market Data Infrastructure Rule (MDIR), the SEC has directed the securities information processors (SIP) to collect and disseminate certain odd-lot quote information to core data, including the odd-lot bids and offers that are priced at or better than the NBBO.

In addition to expanding core data, the SIPs will also disseminate a new field for Best Odd-Lot Orders (BOLO). Both changes will take effect in May of 2026. 

“This change will drive transparency into odd lots for retail investors and bring more of a  level playing field  with the institutional customers,” said David Chu, Vice President of Product Management at FlexTrade.  It’s also expected to provide a more complete picture of liquidity, with odd-lot information added to core data feeds along with more granular data for back testing and liquidity measurement.

Retail vs. Institutional Impact

“The biggest impact will be around the compression of spreads for higher valued  stocks,” said Adam Cohn, Vice President and Head of Trading Operations at TradeStation Securities. “In the case of more expensive stocks, trades less than 100 shares were never displayed. Now they’re going to be displayed in smaller quantities,” he said. “It’s positive for retail customers. Anytime you have narrower spreads, they are better filled.”

However, one of the challenges could be more partial executions for institutional traders. “If the market has odd-lots on the tape, it’s likely there will be more partial fills and more smaller fills to make up an order, said TradeStation’s Cohn.”  It can also create a little more noise on the tape and on the screens with some additional quoting,” said Cohn.

Display and Execution Impacts

The revised round lot sizes will change how the SIP displays and disseminates quotes, orders, and trades on quote montage screens. Industry testing, which began over the summer, has been  underway on Saturdays throughout September and October, ending on November 1^st.

According to FlexTrade’s Chu, the revised round-lots will impact market data and how trades are displayed on screens. As an order and execution management system used by brokers and market makers, for example, Chu said the OEMS will receive the data feed with the revised round-lot sizes from its market data vendor and internal team for display on the montage.

Chu said, “This will give more transparency to the brokers and other traders including retail traders who have Level 2 market data.”

While traders will still submit orders to buy or sell with the number of shares, the Level 2 screens will  now display the number of actual shares, rather than lots. For example,  if a trader submits an order for 256 shares, the new GUI [graphical user interface] will display it as 256 shares, instead of 2 (lots). Under the old GUI, the odd lot shares were hidden.  If the trade was less than 100 shares, the old GUI would display 1 (lot), but it wouldn’t say if the order was for 5 shares or 45 shares. Going forward in November, if the trade is above 10,000 shares, the screen will show 10K+. Chu noted that the firm’s OTC application already showed actual shares, and that now it will be applied to NMS stocks.

“It’s a visual change. Traders have been viewing the quotes in round lots of 100 shares for years.  Traders taking in the new GUI will have to adapt to see it in actual shares, including a mix of lots and odd lots,” said Chu.

On the trading side, Chu doesn’t expect major changes in the execution process. “The routing decisions are still going to remain the same for Reg NMS and [intermarket] sweeps,” he said. However, some market makers may require software changes that reflect the new round lots. “Today, we send market maker pegged orders and stub quotes, so we’re going to have to change that logic based on the price for the stocks they trade in,” he said.

Now that round-lot changes are live, Wall Street is facing a broader series of equity market structure reforms adopted to overhaul Reg NMS.

Tick Size and Access-Fee Reforms

In September of 2024, the SEC also voted to revise tick sizes and access fee caps. For stocks priced at or above $1.00, the SEC is adding a half-cent minimum increment (or $0.005) for quotations and orders in NMS stocks. In line with narrowing tick sizes, the SEC adopted a rule to reduce the access fee cap, which is related to accessing the protected quotes on exchanges and trading centers, from 30 mils (or $0.003 per share) to 10 mils or ($0.001 per share).

Narrower tick sizes are going to be a much larger change than the lot sizes. 

According to analysis by BMLL, based on data from July to September 2025, approximately 1,700 tickers will change tick size, from November onward.  In an article in Traders Magazine, BMLL wrote: “While this only 20% of Reg NMS securities,  it corresponds to about 40% of U.S. dollars traded.”

Last December, the SEC granted a partial stay on the tick-size and access-fee reforms pending a DC Circuit court’s review after exchanges (Nasdaq and Cboe Globa Markets) filed lawsuits. But a U.S. Court of Appeals issued an opinion on October 15, 2025, denying the petitioner’s request, and upholding the SEC’s authority to make changes in this area.

What’s Next?

With the temporary exemption, brokers and exchanges have until November 2026 to prepare for the tick size and access-fee changes. The SEC also extended the implementation date for exchanges on fees to be determined at the point of execution from December until February 2026.

Because many of the rules are interrelated, there is speculation that the SEC could delay them further as it considers other changes to Reg NMS. “There’s a lot of interplay between what the current SEC is looking at versus the older rules that are either pending litigation or have been talked about over the years,” said Cohn. “They want to adopt their own rules, and they have their own vision of the market,” said Cohn. 

For example, Cohn noted that the SEC delayed the compliance date for Enhanced Rule 605 on execution quality, which had been set for Dec. 6, 2025, until August 1, 2026, adding, “that was an update that the industry supported,” he said.

Now the SEC is looking at is the order protection rule (OPR), known as the trade through rule, requiring firms to route orders to top-of-book, protected quotes, which is at the heart of Reg NMS.

Prior to the SEC granting the exemptive relief, Cohn said he would not be surprised if the SEC “tables” the implementation of the tick size and access fee for an indefinite time, while they are working on their proposal on OPR, also known as the trade-through rule.

Georgetown’s Angel contends the SEC’s round-lot tiers are a Band-Aid and that the solution would be to get rid of the round-lots and the trade-through rule, altogether. “It’s time to look at Reg NMS,” said Angel, noting all the rules are related and it needs to be done in a holistic manner.”

Stay tuned for more changes.