The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions. Not all securities are eligible to be settled through DTC. DTC Eligibility has become an often unexpected burden for companies in going public transactions.
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions. Not all securities are eligible to be settled through DTC. DTC Eligibility has become an often unexpected burden for companies in going public transactions.
DTC Eligibility & Going Public - Ask Securities Lawyer 101Brenda Hamilton
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
Don¹t Take Any Wooden Nickels: Lawyers as Targets of Lucrative ScamsNationalUnderwriter
It may come as somewhat of a surprise to some to learn that one kind of business that appears to be particularly susceptible to electronically-induced scams is the legal profession. Yes, lawyers. In the fairly typical scam, lawyers are contacted by foreigners who are in need of legal assistance in collecting debts. The law firms eventually receive checks for large sums from the debtors, and are instructed to deposit them for further instructions. What these law firms do, so as not to comingle with the firms’ accounts, is to establish special accounts at the firms’ financial institutions. Before these checks are cleared by the banks on which the funds were drawn, the clients request that the money representing the checks sent to the law firms, be wired to foreign accounts, less the law firms’ retainer. After the money is received by the foreigners, the law firms are notified that the checks, drawn on foreign or domestic banks, originally sent to the law firms, are bogus.
The article discusses a number of court decisions where lawyers were duped by thieves and sought coverage for
their losses under their commercial insurance policies.
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions. Not all securities are eligible to be settled through DTC. DTC Eligibility has become an often unexpected burden for companies in going public transactions.
DTC Eligibility & Going Public - Ask Securities Lawyer 101Brenda Hamilton
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
Don¹t Take Any Wooden Nickels: Lawyers as Targets of Lucrative ScamsNationalUnderwriter
It may come as somewhat of a surprise to some to learn that one kind of business that appears to be particularly susceptible to electronically-induced scams is the legal profession. Yes, lawyers. In the fairly typical scam, lawyers are contacted by foreigners who are in need of legal assistance in collecting debts. The law firms eventually receive checks for large sums from the debtors, and are instructed to deposit them for further instructions. What these law firms do, so as not to comingle with the firms’ accounts, is to establish special accounts at the firms’ financial institutions. Before these checks are cleared by the banks on which the funds were drawn, the clients request that the money representing the checks sent to the law firms, be wired to foreign accounts, less the law firms’ retainer. After the money is received by the foreigners, the law firms are notified that the checks, drawn on foreign or domestic banks, originally sent to the law firms, are bogus.
The article discusses a number of court decisions where lawyers were duped by thieves and sought coverage for
their losses under their commercial insurance policies.
Nexus Mutual - A mutual for the Ethereum community - D1Conf 2018Hugh Karp
Presented at D1Conf 2018, Nexus Mutual is building a decentralised risk carrier for the Ethereum Community to provide Smart Contract Cover, protecting against bugs or hacks of smart contract code.
This presentation explains what warehouse lending is, how the warehouse lending process works, reasons for the current warehouse line liquidity crisis, and solutions to previous problems with warehouse lending.
Our Law Firm specializes in Offshore Asset Protection through the use of offshore corporation, offshore private banking, offshore foundation... We are providing offshore banking introduction services for more than 8 years. Our team consists of professionals with banking, accounting and legal.
Breakout Session: Head for the Exit: How to Structure, Negotiate & Close the ...Healthegy
Presentation by McDermott Will & Emery at Medtech Conference 2016.
Participant:
Kristian Werling, Partner – McDermott Will & Emery, LLP
Powered by:
Healthegy
For more healthcare innovation
Visit us at Healthegy.com
HOM INtro #32: Partial Mortgage Payments...Where Do They Go?MildredWilkins
If you have ever wondered what happens when you are only able to make a partial mortgage payment, then you need to watch this informative snippet which will clear up the mystery. You will probably be surprised to learn that partial payments are seldom credited to your account—so where do they go?
Tune in and find out...It will also help to explain why the amount you feel is delinquent is different from the amount they say you owe.
Volatility, Disruption and Fraud: The Makings of a Post Transaction Dispute
by Heiko Ziehms, Berkeley Research Group
Research into post m&a disputes, completion mechanisms, factors associated with disputes
Credit & Debt Issues for Military Familiesmilfamln
For the webinar, Credit & Debt Issues for Military Families, hosted by the Personal Finance Concentration Area of the Military Families Learning Network on September 20, 2016
Nexus Mutual - A mutual for the Ethereum community - D1Conf 2018Hugh Karp
Presented at D1Conf 2018, Nexus Mutual is building a decentralised risk carrier for the Ethereum Community to provide Smart Contract Cover, protecting against bugs or hacks of smart contract code.
This presentation explains what warehouse lending is, how the warehouse lending process works, reasons for the current warehouse line liquidity crisis, and solutions to previous problems with warehouse lending.
Our Law Firm specializes in Offshore Asset Protection through the use of offshore corporation, offshore private banking, offshore foundation... We are providing offshore banking introduction services for more than 8 years. Our team consists of professionals with banking, accounting and legal.
Breakout Session: Head for the Exit: How to Structure, Negotiate & Close the ...Healthegy
Presentation by McDermott Will & Emery at Medtech Conference 2016.
Participant:
Kristian Werling, Partner – McDermott Will & Emery, LLP
Powered by:
Healthegy
For more healthcare innovation
Visit us at Healthegy.com
HOM INtro #32: Partial Mortgage Payments...Where Do They Go?MildredWilkins
If you have ever wondered what happens when you are only able to make a partial mortgage payment, then you need to watch this informative snippet which will clear up the mystery. You will probably be surprised to learn that partial payments are seldom credited to your account—so where do they go?
Tune in and find out...It will also help to explain why the amount you feel is delinquent is different from the amount they say you owe.
Volatility, Disruption and Fraud: The Makings of a Post Transaction Dispute
by Heiko Ziehms, Berkeley Research Group
Research into post m&a disputes, completion mechanisms, factors associated with disputes
Credit & Debt Issues for Military Familiesmilfamln
For the webinar, Credit & Debt Issues for Military Families, hosted by the Personal Finance Concentration Area of the Military Families Learning Network on September 20, 2016
FINTOOLS.ltd Is an international company associated with worldwide finance groups and private banking companies, offering the best financial instruments and products to help your businesses grow.
Most private companies are unable to locate an underwriter prior to going public. A direct public offering (“Direct Public Offering”) provides a viable solution to this dilemma. A Direct Public Offering allows a company to sell its shares directly to investors without the use of an underwriter. With a Direct Public Offering, the company files a registration statement with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”).
Typically, in going public transaction Form S-1 (”S-1”) registration statements are used.
A company can use a Form S-1 registration statement to register securities on its own behalf in an initial public offering, register securities on behalf of its selling security holders in a secondary offering or register securities on its own behalf as well as for selling security holders.
SEC registration statements are the most efficient and reliable method for a private company to...obtain public company status. Using a registration statement, companies provide transparency to investors and avoid the risks of reverse merger transactions. This blog post addresses some of the most common questions we are asked about SEC registration statements and and the going pubic process.
Clarke Global - Digital Securities OverviewKadeemClarke3
Comprehensive deck overviewing asset tokenization, securities regulation, blockchain, and future opportunities with digital securities. Created by Kadeem Clarke, founder of Clarke Global and former blockchain VC investor
8 Decimal Capital Security Token Industry OverviewKadeemClarke3
8 Decimal Capital, a leading fund in the blockchain venture capital space, has begun focusing on security tokens (STs) and security token offerings (STOs). We believe this new technology will revolutionize the financial industry and how assets are managed and traded.
Real-World Assets STO + Institutional DeFi Integration
Institutional DeFi refers to tokenize real-world assets with regulatory compliance and institutional-level controls for consumer protection. One of the main benefits of Institutional DeFi is the potential to transform the traditional financial system by making it more transparent, efficient, and accessible while maintaining the necessary safeguards for investor protection and financial stability. This can lead to new products, cost reduction, and faster settlement times for financial institutions.
STO (Security Token Offering) of real-world assets involves the issuance of security tokens that represent ownership of a real-world asset, such as a share of stock, bond, or real estate property. The tokenization and securitization process is carried out by an issuer who follows the necessary regulatory requirements. These security tokens can be listed, distributed, and traded on Institutional DeFi applications to automate various processes such as trading, settlement, and custody. This allows for greater security, efficiency, transparency, and liquidity.
#defi #fundraising #sto #tokenization #nft #securitization #security
Based in Miami, Florida, StateTrust Investments Inc., together with StateTrust Capital, LLC (its affiliated investment advisor), provides financial planning services for high-net-worth clients and families. StateTrust Investments is a registered broker-dealer.
To begin, it is critical to comprehend what a real estate token represents. The real estate token is nothing more than a digital share. It is entitled to the same economic rights as any other share. A real estate token can represent collateralized debt ownership, an equity position in a legal business, a share of the deed, or any other type of real estate asset. Tokenization requires sponsors to take the necessary procedures to allow private or public trading of real estate tokens, or to provide investors the option of exchanging their shares for tokens of another organization that has taken those regulatory steps. Once the investor's stake is tokenized, it is digitally stored on a blockchain and may be traded on secondary markets.
How crypto tokens qualify under swiss law a comprehensive frameworkRonald Kogens
HOW CRYPTO-TOKENS QUALIFY UNDER SWISS LAW: A COMPREHENSIVE FRAMEWORK
Blockchain technology has become a reality as part of the digitalisationof the economy. Every day, there is proof of disruptive transformations of long-standing mechanisms into new ecosystems on the blockchain. While existing market participants are in many cases overwhelmed by the new normal, the new players operate with the greatest creativity and efficiency.
There are no limits to the new ecosystems. The blockchainoffers countless possibilities of disintermediation, of participating in and transferring assets, of recordkeeping and of creating e-commerce beyond the boundaries of national currencies. And we are only at the beginning of this transformation.
Tokens created on the blockchaincan be used to represent a wide variety of instruments and processes. For example, a new means of payment can be created or indirect rights to shares, loans or access rights can be digitised. The legal qualification of the tokens is a major challenge due to the aforementioned diversity.
The important (and not so new) principle for finding your way around in this new digital environment is: “first analyse the context, then undertake the legal classification under the rules of the existing laws.” The hybrid nature of many tokens will defy the clear categories within which the law is typically structured and any attempt to commence by looking at traditional legal instruments and impose them on the tokens of the new ecosystems will therefore fail. Instead each token has to be taken apart and its components must be qualified individually.
In order to bring the tokens of the new ecosystems closer to the public, FRORIEP's Disruptive Technologies Practice Group has developed a Token Framework. In doing so, a distinction is made between cryptocurrencies, tokens giving title to monetary claims and tokens for other purposes. Tokens giving title to monetary claims are further categorisedas being either debt, equity or participation rights tokens. These subcategories stem from the financial treatment of the obligations on the balance sheet or (in the case of participation rights tokens) on the profit & loss statement of the issuer.
The following diagrams show the possible functions of tokens on the blockchainand the FRORIEP Token Framework.
Going private and fairness considerations jeff k. davisMercer Capital
This short presentation is intended to provide an overview of some issues surrounding a decision to take an SEC-registrant private. This presentation does not cover all issues with going private transactions; nor should it be construed to convey legal, accounting or tax-related advice. Companies considering such a move should hire appropriate legal and financial advisors.
Fairness Considerations in Going Private TransactionsJeff Davis
While there once may have been a good reason to be a public company (or not), that may no longer be the case: hence, consideration of a go-private transaction may be warranted. This short presentation is intended to provide an overview of some issues surrounding a decision to take an SEC-registrant private. This presentation does not cover all issues with going private transactions; nor should it be construed to convey legal, accounting or tax-related advice. Companies considering such a move should hire appropriate legal and financial advisors.
Bitcoin, Block Chain, Cryptocurrency and ICOs: A Legal Perspectiveideatoipo
Block chain, bitcoin and other cryptocurrencies, and ICOs have dominated recent headlines. While excitement continues to grow around this rapidly expanding space, there still seems to be a lot of unanswered questions. Roger Royse, founder of the Royse Law Firm, will discuss the legal issues that may determine the future of these emerging technologies.
SEBI - Consultation paper on review of the regulatory framework for debenture...Venkatesh Prabhu
To secure the interests of debenture holders of listed debt issues, Sebi Wednesday proposed a slew of measures to strengthen the regulatory framework for debenture trustees, including raising minimum net worth requirement for registration of such entities to Rs 10 crore from the current Rs 2 crore.
The DT can directly enforce the security without obtaining any consent from the debenture holders.
Dodd-Frank Compliance and Technology Summer Meeting 2013Jeffrey C.Y. Li
Atlas Communications Technology recently co-sponsored the Dodd-Frank Compliance and Technology Summer Meeting. The presentation was an introduction to the complexities of the Dodd-Frank Wall Street Reform and Consumer Protection Act, what firms need to do to bring themselves into compliance, and the technology that can help enterprises meet the stringent demands of the act.
For more information about this conference, or to learn about our Fall meeting in September featuring one of the authors of the act, Congressman Jim Himes, please call 1-855-Dodd Frank (1-855-363-3372) for any questions, or if you wish to talk to one of our presenters today to talk about taking the next steps towards Dodd-Frank Compliance
Atlas Presentation 2013 07-09 dodd-frank summer meeting v1-0 (for online)
Want to use InvestNextDoor, or another returns-based crowd-funded money-raise? You'll need to issue a "security" to do so. Get the essentials here! Pt. 2 in our Securities series.
Regulation A+ expands existing Regulation A. Existing Regulation A provides an existing exemption from registration for smaller issuers of securities. Regulation A+ offerings can be used in combination with direct public offerings and initial public offerings as part of a Going Public Transaction allowing the issuer to avoid the risks of reverse merger transactions.
The process of “going public” with a SEC registration statement is complex and at times precarious. While going public offers many benefits it also comes with risks and quantities of regulations with which issuers must become familiar. Despite the risks even in a down economy, the U.S. markets remain an attractive source of capital for both domestic and foreign issuers. It is important for issuers to have an experienced securities attorney to help navigate through the process and deal with the Securities & Exchange Commission (“SEC”), Financial Regulatory Authority (“FINRA”) & Depository Trust Company (“DTC”).
The EB-5 investor visa program is becoming more popular since Rule 506 (c) became law allowing issuers to advertise their offerings to foreign investors seeking U.S. residency. As with any investment proper due diligence is crucial. The Securities and Exchange Commission’s (“SEC”) Office of Investor Education and Advocacy and U.S. Citizenship and Immigration Services (“USCIS”) have issued recent warnings to foreign investors regarding the fraudulent use of the EB-5 program.
The OTC Markets OTCQX offers foreign issuers seeking to go public in the U.S. an appealing alternative to listing on a stock exchange. Foreign issuers whose securities are listed on a foreign stock exchange that qualify for the exemption from the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), can go public in the U.S by quotation of their securities on the OTCQX without registration or reporting obligations to the Securities and Exchange Commission (the “SEC”).
More and more issuers going public opt for a direct public offering. In a direct public offering management sells shares of the company’s stock directly to investors, rather than through the efforts of an underwriter. Going public with a direct public offering eliminates costs and risks associated with a reverse merger transaction. Private companies conducting a direct public offering should consider the pointers below to ensure a successful and cost-effective going public transaction.
Investor relations or stock promotion involves the dissemination of information about a public company to increase its stock price and/or trading volume.
The person who publishes this information is sometimes referred to as a “Stock Promoter”, “Investor Relations Provider” or “Stock Tout”.
The EB-5 investor visa program is becoming more popular since Rule 506 (c) became law allowing issuers to advertise their offerings to foreign investors seeking U.S. residency. As with any investment proper due diligence is crucial. The Securities and Exchange Commission’s (“SEC”) Office of Investor Education and Advocacy and U.S. Citizenship and Immigration Services (“USCIS”) have issued recent warnings to foreign investors regarding the fraudulent use of the EB-5 program.
On March 25, 2015, the Securities and Exchange Commission (“SEC”) adopted amendments to Regulation A pursuant to the mandate of Section 401(a) of the JOBS Act which became effective last month. The Regulation A+ amendments include new forms and revamping Form 1-A. Regulation A+ expands existing Regulation A. Regulation A+ offerings can be used in combination with direct public offerings and initial public offerings as part of a going public transaction. The Regulation A+ exemption allows companies to more easily obtain initial shareholders required by the Financial Industry Regulatory Authority (“FINRA”). While Form 1-A requires less information than a Form S-1 registration statement, expansive disclosures are required.
Companies can solicit investor interest for a potential Regulation A+ offering, both before and after the filing of their Form 1-A offering statement with the SEC. The issuer’s solicitation materials used after the Form 1-A offering statement is publicly filed, must be accompanied by a preliminary offering circular or provide a URL where the preliminary offering statement can be obtained. Additionally, materials used to solicit investors must be filed as exhibits to the Form 1-A offering statement.
Regulation A+ expands existing Regulation A. Existing Regulation A provides an existing exemption from registration for smaller issuers of securities. Regulation A+ offerings can be used in combination with direct public offerings and initial public offerings as part of a Going Public Transaction. Regulation A+ simplifies the process of obtaining the seed stockholders required by the Financial Industry Regulatory Authority while allowing the issuer to raise initial capital.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
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Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
Skye Residences | Extended Stay Residences Near Toronto Airportmarketingjdass
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Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
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Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
2. The Depository Trust and Clearing Corporation (“DTCC”),
through its subsidiaries, provides clearing, settlement and
information services for securities. DTCC’s subsidiary, the
Depository Trust Company (“DTC”) was created to improve
efficiencies and reduce risk in the clearance and settlement of
securities transactions. Not all securities are eligible to be
settled through DTC. DTC Eligibility has become an often
unexpected burden for companies in going public transactions.
Issuers must satisfy the criteria set by DTCC to be settled
through DTC. All companies must satisfy this criteria in order
to be DTC eligible, including both Securities and Exchange
Commission (“SEC”) reporting and non-reporting issuers. This
presentation discusses the most common questions we receive
about DTC eligibility has become a growing concern in going
public transactions.
3. What Is The Depository Trust Company
(“DTC”)?
DTC is the only stock depository in the United States.
Why Is DTC So Important To Public
Companies?
When DTC provides services as the depository for a company’s shares, the
shares can trade electronically. Without DTC eligibility, it is almost
impossible for an issuer to establish an active market in its shares.
4. How Do Public Companies Obtain DTC
Eligibility?
Issuers must satisfy specific criteria to receive initial DTC eligibility, and
to remain DTC eligible. Even after those securities become eligible, DTC
may limit or terminate its services.
How Does DTC Limit Its Services?
DTC limits its service by placing a chill (“DTC Chill”) on a security and
terminates its services by placing a lock (“Global Lock”) on the security.
5. Is There A Conspiracy Between The DTC And
The SEC To Eliminate All Small Cap Public
Companies By DTC Placing Global Locks And
Chills On Their Securities?
When DTC eligibility is limited or terminated, issuers and their securities
attorneys often scream foul play asserting various conspiracy theories, each
more ludicrous than the last. We have all read about issuers who self-
righteously proclaim that their loss of eligibility was due to conniving short
sellers, nefarious clearing firms and the purported “agenda” of the SEC to
eliminate small broker dealers and microcap issuers.
The reality is that microcap issuers lose DTC’s services for three legitimate
reasons, failures to cover, illegal issuances of free trading securities and
fraudulent investor relations activity.
6. If I Obtain A Legal Opinion, Will I Get DTC
Eligibility Back For My Company?
Not if the opinion is legally flawed. Many officers and directors of
microcap companies are facing the harsh reality that reliance upon a
legal opinion will not enable them to get a Chill or Global lock removed.
DTC reserves the right to refuse to rely upon the opinion of any issuer’s
securities attorney. In the last few years, the SEC has brought multiple
enforcement actions against attorneys in connection with tradability
opinions rendered for microcap issuers. Often these actions are preceded
by a loss of eligibility.
7. What Is DTCC’s Office Of Corporate And
Regulatory Compliance And What Do They
Do?
DTCC’s Office of Corporate and Regulatory Compliance monitors
unusually large deposits of microcap securities that are deposited into
DTC when there is a suspicion or indication that the issuer or persons
associated with the issuer have violated the securities laws. With
Microcap stocks, this behavior typically involves the deposit of large
blocks of illegally unrestricted securities rendered in connection with
convertible notes, reverse merger transactions or Rule 504 offerings.
8. Does FINRA Have Anything To Do With
All The DTC Chills?
A review is also prompted when issuers provide notice to FINRA
pursuant to Rule 6490, of certain corporate actions. While FINRA
examines the corporate action prompting the notice under Rule 6490,
DTC reviews matters related to the issuer’s shares including the
tradability of the securities it holds on deposit in the name of CEDE &
Co. DTC staff may discover (previously undetected) illegal free trading
share issuances or other fraudulent activity that will persuade them to
limit or suspend its services. In these instances, DTC may make
referrals to appropriate regulators including the SEC’s Division of
Enforcement.
9. How Will A DTC Chill Or Global Lock
Impact Trading Of My Company’s Stock?
A Chill restricts DTC’s services, including limiting a participant’s ability to
deposit or withdraw chilled securities. A Chill may last a few days or for an
extended period of time depending upon the problems that caused the Chill
and the issuer’s willingness to address them. A “Global Lock” is a
termination of all of all services to an issuer. Like a Chill, a Global Lock
may last a few days or for an extended period of time, depending on the
reason for the action. If the fundamental issue cannot be corrected, then the
security will be removed from its depository, and transactions in the
security subject to the Global Lock will no longer be eligible for clearing at
any registered clearing agency. When this happens, clearance and
settlement of open market trades is significantly delayed because trades
can only occur upon physical delivery of stock certificates between the buyer
and seller’s brokerage firms. In such circumstances it could take weeks for
trades to clear and settle.
10. Will DTC Tell Me Why My Stock Is
Chilled?
DTC does not always disclose the reason for a Chill or Global Lock, nor
does it suggest how long it will be in effect.
Where Can I Find A List Of Chilled
Stocks?
DTC Chills and Global Locks are publicly announced on the DTCC website.
11. Who Can Help Me Remove A DTC Chill?
Generally, two people are needed to help an issuer remove a Chill. These are
a securities attorney acceptable to DTC, who can render a tradability opinion
concerning the issuer’s unrestricted shares and a DTC Market participant,
who can ask that DTC provide its services with respect to a security. Anyone
else claiming he can secure eligibility or remove a Chill is not qualified to do
so.
Will DTC Ever Remove A Chill Or
Global Lock?
Yes, DTC Chills and Global Locks have been removed from multiple public
companies. In some circumstances, DTC obtains additional information from
the issuer and an opinion from its securities attorney regarding the activity
in question.
12. What Are The Fairness Procedures That
Apply To DTC?
On September 24, 2009, the SEC determined that DTC must provide
issuers with fairness procedures, adding further that its suspension of its
services to an issuer is subject to SEC review upon request. Unfortunately,
the SEC has not defined adequate fairness procedures precisely. Even with
a fairness hearing there can be no assurance that DTC will resume its
services for an issuer’s securities; it continues to have a broad discretion
with respect to its services.
13. What Should I Do If I Want To Get DTC
Eligibility Or Have A DTC Chill
Removed?
Because DTC may choose to refer securities violations it discovers to the
SEC’s Division of Enforcement, issuers should consult with a securities
attorney at all stages of the DTC process, particularly when information
must be provided by the issuer. The selection of a securities attorney to
address problems, and potential problems, should not be considered a
routine legal matter. Issuers expecting to obtain and maintain eligibility
need to recognize that their securities could become subject to a DTC
Chill if they go public in a reverse merger or use the services of securities
professionals – including unregistered brokers, investor relations firms,
transfer agents and even securities lawyers- who have been the subject of
SEC investigations and enforcement actions.
14. For further information about this securities law Q & A, please
contact Brenda Hamilton, Securities Attorney at 101 Plaza Real
South, Suite 202 North, Boca Raton Florida, (561) 416-8956, or
info@securitieslawyer101.com. This securities law blog post is
provided as a general informational service to clients and friends
of Hamilton & Associates Law Group, P.A. and should not be
construed as, and does not constitute legal advice on any specific
matter, nor does this message create an attorney-client
relationship. Please note that the prior results discussed herein do
not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Going Public Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com