NYSE Group Inc. announced that it has filed a proposal with the U.S. Securities and Exchange Commission to begin a six-month pilot program quoting options issues in pennies.

It plans to quote issues listed for trading on the NYSE Arca Options platform in 1¢ increments as opposed to the current industry standard 5¢ for option series quoted under $3.00. Additionally, current pricing increments for options quoted at $3 per contract or greater is 10¢, which under the proposed plan would be reduced to 5¢ for issues in the pilot program.

“NYSE Arca applauds the SEC’s introduction of options penny quoting in a measured process as a means of studying its effects on options trading and determining the benefits to the investing public,” said Jon Werts, NYSE Group vice president. “Consistent with our commitment to providing the public with the best, most robust menu of products and services, we have filed a comprehensive plan to analyze penny quoting and mitigate quote traffic.”

The exchange says that the proposed quote mitigation plan will significantly reduce overall quote traffic in all of NYSE Arca’s options issues, not just those selected for the pilot program. It proposes to disseminate quotes only in “active” options series.

The proposed penny pilot will begin Jan. 26, 2007 with 13 issues including: the Nasdaq-100 Index Tracking Stock, iShares Russell 2000 Index Fund, Semiconductor Holdrs Trust, General Electric Co., Advanced Micro Devices Inc., Microsoft Corp., Intel Corp., Caterpillar Inc., Whole Foods Market Inc., Texas Instruments Inc.,Glamis Gold Ltd., Flextronics International Ltd. and Sun Microsystems Inc.