Category: Global Lock

Global Lock: A DTC chill is the suspension of certain DTC services with respect to an Issuer’s securities. Those services can be book entry clearing and settlement services, deposit services (“Deposit Chill”) or withdrawal services. A chill can pertain to one or all of these services. In the case of a chill on all services, including book entry transfers, deposits, and withdrawals, the term of art is a “Global Lock…

May132014

Once Again, DTC Amends Proposed Procedures for Issuers Affected by Chills and Proposes Subsequent Rule Change

Background

On October 8, 2013, I published a blog and white paper providing background and information on the Depository Trust Company (“DTC”) eligibility, chills and locks and the DTC’s then plans to propose new rules to specify procedures available to issuers when the DTC imposes or intends to impose chills or locks. On December 5, 2013, the DTC filed these proposed rules with the SEC and on December 18, 2013, the proposed rules were published and public comment invited thereon.  Following the receipt of comments on February 10, 2014, and again on March 10, 2014, the DTC amended its proposed rule changes.  This blog discusses those rule changes and the current status of the proposed rules.

The new rules provide significantly more clarity as to the rights of the DTC and issuers and the timing of the process.  For a complete discussion on background and DTC basics such as eligibility and the evolving procedures in dealing with chills and locks,

Jan282014

DTC Has Published Proposed Rules Related To Chills and Locks

Background

On October 8, 2013, I published a blog and white paper providing background and information on the Depository Trust Company (“DTC”) eligibility, chills and locks and the DTC’s then plans to propose new rules to specify procedures available to Issuers when the DTC imposes or intends to impose chills or locks.   On December 5, 2013, DTC filed these proposed rules with the SEC and on December 18, 2013, the proposed rules were published and public comment invited thereon (“Rule Release”). For background on DTC basics such as eligibility and the evolving procedures in dealing with chills and locks, please see my prior blog here .

The Depository Trust Company (“DTC”) is a central securities depository in the U.S. which was originally created as a central holding and clearing system to handle the flow of trading securities and the problems with moving physical certificates among trading parties.  The DTC is regulated by the SEC, the Federal Reserve System and the

Oct082013

DTC Unveils Procedures and Plans for a Rule Change that Applies to Issuers Affected By Chills and Locks

Background

Back in October and November of 2011, I wrote a series of blogs regarding DTC eligibility for OTC (over-the-counter) Issuers.  A key eligibility criterion is that the securities that were distributed in accordance with Section 5 of the Securities Act of 1933 do not have transfer restrictions and are freely tradable.  To meet this criterion, the securities must have been issued pursuant to an effective registration statement or valid exemption thereto.  I have followed that series with various blogs regarding DTC chills and the evolving process to first learn the cause of the chill and second, to reach a resolution. 

The Depository Trust Company (“DTC”) is a central securities depository in the U.S. which was originally created