DEFINITION of '19c3 Stock'

19c3 stock is any stock listed on an equity exchange after April 26, 1979. This classification allows members of exchanges to trade these stocks off the board as opposed to being physically present on an exchange trading floor. The classification of a 19c3 stock refers to SEC rule 19c3, the formal regulation that allows off-board transactions to be made.

BREAKING DOWN '19c3 Stock'

Prior to April 26, 1979, members of the major exchanges (e.g., the New York Stock Exchange) were not allowed to conduct stock trades if they were not physically present at an exchange. The designation of 19c3 stock was the first step toward the creation of the National Market System (NMS). The initial pilot NMS program included 30 19c3 stocks. Almost all stocks listed on exchanges are currently 19c3 stocks. Decades ago, before 1979, stock trading was very much a face-to-face process with verbal orders, paper tickets and lots of running around and yelling in excited markets. As the number of stock listings grew and computer systems became more sophisticated to handle trading volumes for the steady increase in market participants, the SEC felt the need to evolve. The benefits of off-board trading were obvious: speed, efficiency, lower cost, fewer trading errors, computerized records. As a practical matter today, no one thinks of a stock as a 19c3 stock; an investor takes it for granted that a stock that he or she wants to trade will be executed electronically and nearly instantaneously when an order is submitted. Sometimes a stock order has to be transacted by members on an exchange floor, but this would be a rare case or special situation.

RELATED TERMS
  1. Equity Market

    An equity market is a market in which shares are issued and traded, ...
  2. Trading Floor

    Trading floor refers to an area of an exchange where trading ...
  3. Primary Exchange

    A primary exchange like the New York Stock Exchange facilitates ...
  4. Miami Stock Exchange

    The Miami Stock Exchange offers a full range of processing and ...
  5. Normal Market Size

    Normal market size is a share classification structure based ...
  6. Futures Exchange

    A futures exchange is a central marketplace, physical or electronic, ...
Related Articles
  1. Investing

    Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.
  2. Trading

    Electronic Trading Tutorial

    Learn about the systems that run the market.
  3. Investing

    How Nasdaq Continues To Innovate

    For centuries, a stock market was a physical arena where buyers and sellers traded shares. Then the NASDAQ opened and changed everything.
  4. Insights

    The Birth of Stock Exchanges

    Learn about the evolution of stock exchanges, from the Venetian states to the British coffeehouses, and finally to the NYSE.
  5. Tech

    190 Cryptocurrency Exchanges: So How to Choose

    With the plethora of digital currency exchanges, how can an investor choose the right one?
  6. Insights

    If You Buy Stocks Online, You Are Involved in HFTs

    Many people don't realise that some half to two-thirds of all trades use high-frequency trading in some fashion.
  7. Trading

    Dual And Multiple Exchange Rates 101

    Why would a country choose to implement dual or multiple exchange rates? It's risky, but it can work.
  8. Managing Wealth

    Top Tips For Exchanging Money

    Take these tips to heart to avoid wasting money when you exchange currencies.
RELATED FAQS
  1. What does a New York Stock Exchange membership entail, and why is it known as 'owning ...

    Owning a seat on the NYSE enables a person to trade on the floor of the exchange, either as an agent for someone else or ... Read Answer >>
  2. What are the rules behind the delisting of a stock?

    Find out the criteria for a company to remain listed on a stock exchange. Learn what actions would lead to a security being ... Read Answer >>
  3. Who uses bills of exchange?

    Find out who uses bills of exchange, why they are important in international trade and what happens when a bill is traded ... Read Answer >>
Trading Center