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http://www.dtcc.com/downloads/legal/imp_notices/2011/dtc/set/0846-11.pdf
#: B0846-11
Date: August 5, 2011
To: All Participants
Category: Settlement
From: Settlement Department
Attention: Settlement Manager/Managing Director/Cashier
Subject: Clean up of Aged Fails in Select Globally Locked CUSIPs
DTC will support a program to facilitate the industry's clean up of aged fails in select globally
locked securities. This notice details the information necessary for firms to participate in this
program, which is scheduled to occur during the period August 15, 2011 through August 19,
2011.
Background
DTC may impose certain restrictions on a security in situations where DTC may become aware of
certain potentially illegal or otherwise questionable features of a security, its issuer or other principal
parties. In addition, DTC may place restrictions when it has been informed by the issuer or its agent,
regulators or law enforcement, or has other compliance concerns that its Cede & Co certificate
inventory has been compromised due to unauthorized, altered, fraudulent or counterfeit share issuance.
If DTC reasonably suspects that all or a portion of its street name holdings of a security, may not be
fungible and freely transferable as required for DTC services, it may decide, with respect to that
security, to chill one or more of its services or place a global lock on all services, as it deems
appropriate.
Impact of a Global Lock and Trade Fails
A global lock on a security prevents the security from being transferred on the books of DTC and
otherwise restricts any DTC activity with respect to the security. For so long as the global lock is in
effect, Participants are unable to settle any further trades in that security, as their inventory is frozen
and settlement of pending trades will fail. If counterparties nevertheless continue to trade in a security
which is globally locked and those trades are submitted to DTC for settlement, those trades will also
fail and be rejected in DTC’s system.
In connection with certain designated CUSIPs (see Exhibit A attached), although DTC issued an
Important Notice to its Participants to advise that the global lock was implemented, many Participants
Non-Confidential 2
did not immediately stop trading in these securities and additional trades occurred, so that firms
experienced a growing number of trade fails.
DTC has been working proactively with the industry to increase awareness of our global lock process,
to eliminate these difficulties in future. DTC also enhanced its procedures to expedite the release of
any Important Notice reflecting a global lock, so firms can promptly halt trading in affected securities.
Additionally, DTC implemented on June 10, 2011 a global lock reason [code] on its security master
file and related outputs (ELIS and DWIZ files - see important notice B-0811-11 dated May 24, 2011 -
http://www.dtcc.com/downloads/legal/imp_notices/2011/dtc/ope/0811-11.pdf) to allow Participants to receive
an automated notification in the event a global lock occurs. This enhancement provides Participants
the ability to update their systems to automatically block future trading of affected securities, as well as
alerting Compliance areas of the Participants so that they may investigate activity related to these
securities.
Despite these improvements, Participants and DTC have a legacy issue of accumulated trade fails that
occurred prior to these enhancements.
Proposed Solution
Working with the Participants, DTC identified a number of options and determined that the preferred
solution is to lift the global lock on designated CUSIPs for a limited period of time, to allow
Participants to take appropriate steps (including any appropriate segregation updates) to make
deliveries that will resolve outstanding fails in the designated CUSIPs. DTC will report all such deliver
orders during the specified period to the Securities and Exchange Commission.
DTC cautions participants that, if a participant were to make or receive deliveries to or from a
party other than the original counterparty or the NSCC assigned counterparty, which resulted in
the fails in the designated CUSIP, change of such counterparty to the transaction likely would be
deemed to be effecting a new transaction.
Securities subject to a trading halt by the Commission will be excluded from this program. The
attached list will be re-verified during the Amnesty period and if any securities are subsequently found
to be subject to a trading halt, they will be excluded at that time and Participants will be informed via a
subsequent important notice.
As to these designated CUSIPs, however, DTC will not lift the related deposit chill. If there are failed
deliveries in these CUSIPs that are dependent upon physical securities held outside of DTC, settlement
of those trades must be effected by physical delivery outside of DTC.
As outlined below, DTC will offer Participants the opportunity to make the necessary updates and
deliveries to complete their failed transactions during a specified limited time period, as follows:
DTC will lift the global lock and the SEG chill on Friday night, August 12, 2011 until
approximately 5:00 PM Friday night August 19, 2011. DTC will maintain chills on other
services including deposits and withdrawals to prevent any unintended transactions from
occurring. This update will permit participants the ability to send in their memo seg
instructions and permit them to segregate or release positions in these securities for several days
in advance of the delivery time period outlined below,
Non-Confidential 3
The Eligible Securities (ELIS) files will systematically reflect the global lock and SEG chill
removals and are typically available to participants between 7:30 PM and 8:00 PM EST each
day.
The Data Delivery Service (DWIZ) change files will also reflect the global lock and SEG chill
removals and are typically available to participants between 9:00 PM and 10:00 PM EST each
day.
In addition, on the evening of August 17, 2011, DTC will also remove the DO chill on all
CUSIPs identified below. This change will also be reflected in the ELIS and DWIZ files
created on the night of August 17, 2011. This will allow all participants to submit deliver
orders to DTC for processing on the next 2 business days, August 18 and August 19, 2011.
Obligation Warehouse (OW) users should include the OW control number on all DOs to ensure
that the settlement status associated with these obligations is updated in the OW.
These CUSIPs will maintain this “unlocked” status until the night of August 19. This will
permit participants to have two business days to process instructions against an ELIS and
DWIZ files that contains the changes to the affected CUSIPs.
DTC will continue to accept MSEG, SEG and Deliver Order and reclaim instructions for all
CUSIPs identified below until the applicable valued cutoffs occur or approximately 5:00 PM on
August 19, 2011.
Prior to the night cycle beginning on August 19, 2011, DTC will restore all CUSIPs to their
original status by reinstating the SEG and DO chills as well as the applicable global locks. Any
future dated transactions or additional input after the status is reinstated, e.g., memo seg, Night
Deliver Orders will reject.
If you have any questions regarding this notice, please contact your Relationship Manager.
Non-Confidential 4
# CUSIP Security Description Symbol Date of Action
1 913513107 UNIVERSAL FOOD & BEVERAGE INC N/A 04/28/11
2 48254P106 KMA HOLDINGS MCDA 04/25/11
3 57059N109 MARKETING CONCEPTS INTERNATIONAL MCCI 04/15/11
4 572356202 MARSHALL HOLDINGS INTERNATIONAL MHLI 04/15/11
5 69372L850 PACEL CORP PCLO 04/15/11
6 81213Y108 SEALIFE CORP SLIF 04/15/11
7 933706103 WANNIGAN CAPITAL CORP N/A 04/15/11
8 936902501 WASATCH PARM INC WSHP 04/15/11
9 08520E103 BERMAN CENTER INC BRMC 03/31/11
10 47188V205 JAVA DETOUR INC JVDT 03/31/11
11 54141Y102 LOGISTICAL SUPPORT INC LGSL 03/31/11
12 74266D303 PROELITE INC PELE 03/31/11
13 98953T107 ZICIX CORP ZICX 03/28/11
14 169382108 CHINA DIGITAL MEDIA CORPORATION N/A 03/18/11
15 37990T100
CHINA MOBILITY SOLUTIONS INC
(NOW KNOWN AS GLOBAL PEOPLELINE)
GPPL 03/18/11
16 554042101 M-WISE INC MWIS 03/18/11
17 71943E100 PHYSICAL PROPERTY HOLDINGS INC PPYH 03/18/11
18 74161T106 PRIMEGEN ENERGY CORP PGNE 03/18/11
19 80917T308 SCORE ONE INC SREA 03/18/11
20 81941R102
PINGCHUAN PHARMACEUTICALS INC
(NOW KNOWN AS SHANDONG ZHOUYAN SEED &
NURSERY)
SZSN 03/18/11
21 98159A100 WORLDWIDE BIOTECH AND PHARMACEUTICALS WWBP 03/18/11
22 003865102 ABSOLUTEFUTURE.COM AFTI 03/03/11
23 12619H100 CO2 TECH LTD CTTD 03/03/11
24 727563108 PLASTICON INTERNATIONAL INC PLNIQ 03/03/11
25 847248200 SPATIALIGHT INC SPLT 03/03/11
26 92922N101 WAMEX HOLDINGS INC WAMX 03/03/11
27 137693107 CANNON EXPLORATION CNEX 02/17/11
28 456635101 IFINITY MEDICAL GROUP IMGR 02/17/11
29 83420E107 SOLEI SYSTEMS, INC. SOLI 02/17/11
30 189098106 CLOUD CENTRIC SYSTEMS INC CLDR 02/03/11
31 86273M100 STRATEGIC MANAGEMENT INC SMPP 02/03/11
32 01551R101 ALGAE FARM USA INC COM ALGF 01/27/11
33 054617105 AXIS TECHNOLOGIES AXTG 01/21/11
34 37950D103
ZCOM NETWORKS INC (N/C TO GLOBAL GATEWAY
MEDIA & COMM)
GGMC 01/21/11
35 422463109 HEATHROW NATURAL FOOD AND BEV HRNF 01/21/11
36 554187104 MACADA INC MCDA 01/21/11
37 670762202
PERIHELION GLOBAL INC N/CTO NY MET
HOLDINGS
NYMH 01/21/11
38 682347208 141 CAPITAL INC ONCP 01/21/11
39 749283206 RBID.COM INC NEW RBID 01/21/11
40 749318101 RCC HOLDINGS INC RCCH 01/21/11
41 78249M603 RUSSELL INDUSTRIES, INC RUSL 01/21/11
42 886352202 TIDALWAVE HOLDINGS INC TWVH 01/21/11
43 71643L107 PETRO AMERICAN CORP PTRZ 11/26/10
44 922576202 VELTREX CORP VLXC 11/15/10
45 05546H102 BIH CORPORATION BIHC 10/01/10
46 749126207 QURI RESOURCES INC QURS 10/01/10
Non-Confidential 5
# CUSIP Security Description Symbol Date of Action
47 076012202 BEDERRA CORP BEDA 09/16/10
48 37364Q104 GEOTEC INC GETC 08/17/10
49 346196108 FOREST RESOURCES MNGMT FTRM 06/11/10
50 849109103 SPONGE TECH DELIVERY SYSTEM SPNG 06/02/10
51 638691105 NATIVE AMERICAN ENERGY NAGP 05/27/10
52 00725F308 ADRENALINE NATION ENTERTAINMENT NA 05/14/10
53 00764K101 AEGIS ASSESMENTS, INC AGSI 05/14/10
54 12507U106 CDI DEVELOPMENTS, INC NA 05/14/10
55 16938L106 CHINA GOLD CORP CGDC 05/14/10
56 29445M103 EQUIPMENT AND SYSTEMS EQSE 05/14/10
57 380795104 GOLDEN APPLE OIL AND GAS GAPJ 05/14/10
58 38144Y102 GOLDMARK INDUSTRIES INC GDKI 05/14/10
59 39573M106 GREENSTAR LIGHTING GRLH 05/14/10
60 46262T102 IPACKETS INTERNATIONAL IPKL 05/14/10
61 54147U104 LOM LOGISTICS INC LOMJ 05/14/10
62 63008E109 NANO FORCE INC NNFC 05/14/10
63 92855W102 VIYYA TECHNOLOGIES INC VYON 05/14/10
64 53219E808 LIFELINE BIOTECHNOLOGIES, INC LLBO 05/03/10
65 84915Q100 SPOOZ, INC. SPZI 05/03/10
66 G4411NAA5 HERITAGE INV CAP LTD, Ltd 9% 8/31/2010 N/A 04/21/10
67 607587409 MODERN ENERGY CL B MDRG 03/25/10
68 607587201 MODERN ENERGY N/A 03/15/10
69 39573P208 GREENSTONE HOLDINGS INC GSHN 02/23/10
70 272023102 EAST DELTA RESOURCES CORP N/A 02/05/10
71 01374L109 ALCHEMY CREATIVE INC ALMY 01/26/10
72 08782W106 BEVERAGE CREATIONS INC BVRG 01/26/10
73 62847C100 MY VINTAGE BABY MVCY 01/26/10
74 61944V102 MOSAIC NUTRICEUTICALS N/A 01/12/10
75 256647108 DOLL TECH GRP INC DTGP 10/13/09
76 169364106 CHINA ADNET ENTERPRISES CAEJ 10/13/09
77 50115V108 KSW INDUSTRIES INC* KSW 10/13/09
78 45775F104 INNOLIFE PHARMA INC INNF 10/13/09
79 53184V108 LIFE EXCHANGE INC LFXG 10/13/09
80 527299101 LEVEL VISION ELECTRO LVLV 10/13/09
81 54569N109 LOTTA COAL INC LCOL 10/13/09
82 559071204 MAGELLAN ENERGY LTD MGLG 10/13/09
83 568093108 MARINAS INTERNATIONAL INC MNSI 10/13/09
84 73035T102 POCKETOP CORPORATION* PKTO 10/13/09
85 902658103 UDS GROUP INC. COM UDSG 10/13/09
86 91021P207 UTD ENVIRO ENERGY CORP UTEM 10/13/09
87 91688L200 UPTREND CORPORATION UPCP 10/13/09
88 92909T204 VSHIELD SOFTWARE CORPORATION VSHE 10/13/09
89 98148A203 WORLD HOCKEY ASSOCIATION WHKA 10/13/09
90 929367100 WW ENERGY INC WWNG 10/13/09
91 294113105 ENZYME ENVIRONMENTAL EESO 09/30/09
92 761379106 REVENGE DESIGNS RVGD 09/30/09
93 22743P100 CROSS ATLANTIC COMMODITIES CXAC 09/30/09
94 46018A100 INT'L POWER GROUP IPWG 09/30/09
95 27031F102 EARTH BIOFUELS EBOF 06/17/09
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