A little more help, please?
I'm more accustomed to seeing a small cap issuing shares for "services" (which I presume would be restricted?***) versus the reasons for distributions that you describe and I'm wondering if the handling and record keeping differs.
Can I assume that such an issuance would be made via a cert made out to the service provider?
That cert would be issued by the T/A, correct?
The service provider could deposit the restricted share cert itself with their broker, correct?
Here's where I get a little lost:
The 10-K instructions call for the Security ownership of certain beneficial owners and management section to include any party "who is known to the registrant to be the beneficial owner of more than five percent of any class of the registrant's voting securities." Apparently it is the obligation of the issuer to ferret those people out. I wouldn't be surprised if many small caps either know or think that they know who those parties are, what they hold and proceed accordingly, but.....
I believe that one way that they could properly do that is via copies of the OBO and NOBO lists, although the OBO list would not provide the necessary identification should a 5% owner appear on it. I also believe that by doing the issuer could improperly conclude that CEDE itself was a 5% owner (because "CEDE is DTCC's nominee account for street shares.")
Would the service provider's restricted shares appear as CEDE shares in the OBO and NOBO lists?
I hope that question makes sense. If not, please tell me where I've gone awry.
Thanks very much for your time.
***An issuer can't distribute shares to a service provider that can be sold immediately, can they?