MedSmart Group Inc (MSGP)

[Rothman]

Yea once chill lifts KNSC will roar back

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.”

From the DTC’s perspective, a chill does not change the eligibility status of an Issuer’s securities, just what services the DTC will offer for those securities. For example, the DTC can refuse to allow further securities to be deposited into the DTC system or while an Issuer’s securities may still be in street name (a CEDE account), the DTC can refuse to allow the book entry trading and settlement of those securities.

On December 18, 2013, the SEC published the DTC’s proposed rule changes specifying procedures available to Issuers when the DTC imposes or intends to impose chills or locks. The entire rule release is available on the SEC website.