Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened? On this day in 1997, the NASDAQ reduced its minimum tick size for most stocks from ⅛ to 1/16.

Where The Market Was: The Dow closed at 7,289.40. The S&P 500 traded at 846.36.

What Else Was Going On In The World? In 1997, Diana, Princess of Wales, was killed in a car crash in Paris. Scientists at the Roslin Institute in Scotland revealed Dolly the sheep, the first successfully cloned mammal. The average price of a new house was $124,100.

Nasdaq Reduces Tick Size: In June 1997, the U.S. Securities and Exchange Commission ordered the NASDAQ to reduce its minimum tick size for all stocks with a bid price of at least $10 from ⅛ to 1/16.

Tick size is the minimum increment of price movement for a stock. For stocks in the U.S. market, tick size is expressed in dollars or cents.

Prior to 1997, NASDAQ stocks traded with tick sizes of ⅛, or 12.5 cents. In 1997, that tick size was reduced to 1/16, or 6.25 cents.

Tick size was again reduced in 2005 via SEC Rule 612, which required the minimum tick size for stocks priced over $1.00 to be 1 cent. Stocks priced under $1 can have a tick size of 0.01 cent. This transition from fractions to cents is known as decimalization.

In 2016, the SEC conducted a two-year pilot program to see if boosting the tick size of small cap stocks from 1 cent to 5 cents would boost liquidity. However, the program failed to generate the intended results.

Image credit: bfishadow, Flickr