The Real DTCC Discussion

[BigBake1]

Where are you "verifying" the stock structure? At the TA?

Here is a little game played here in these OTC securities, the information is only as good as the source and at a specific date. The trade cycle is T+3, that is Trade date plus 3 days for settlement of a trade. In some circumstances it can be up to 35 days for settlement using an exception under SEC Rule 203 for debt conversions. This is a form of LEGAL Naked Short Selling. the Block Positioner sells restricted shares into the market based upon an opinion and documents that there will be delivery of Free Trading shares by a date.

So how does either of these settlement skew the share structure data reported to a shareholder? The Float for example will not reflect the additional shares into the market until settlement has occurred. Many OTC CEOs report DTCC numbers on a date because they know that settlement hasnt occurred for a large block position sold. It causes controversy that the company isnt the source. Quite amusing to say the least.

The TA should at least have a correct OS, as issuance is not effected, but even that becomes a little interesting, some of these companies issue stock and fail to report immediately the issuance. As I said, the information is only as good as the source and the date.

I take the date given and look at trade activity that fits in that window during the T+3 period. You get a more accurate picture.