Tuesday, October 04, 2011 11:43:59 AM
So another thing to stop dilution.
but the one downside to this, is the Broker Houses are now "giving the MM's the shares" to trade and they make money off the spreads and selling higher then the client.
An NSCC Illiquid Deposit Requirement is applied when a customer sells more than 25% of the average daily trading volume of a security during any three day settlement cycle. The amount of this Deposit Requirement depends on the percentage of the Average Daily Volume represented by the open sales. The Deposit Requirement has very little relation to the value of the trade, and is generally at least ten times the trade value and may be one hundred times the trade value, or even more. This Deposit Requirement is incurred even if the customer owns the shares and even when Penson has these shares long in its DTC account. The Deposit Requirement is imposed during the time period between trade and settlement date.
Penson is therefore changing its policies, effective August 16, 2011, regarding the trading activity of securities priced under $1.00 ("low priced security").
* If a customer creates an NSCC Illiquid Deposit Requirement greater than $50,000, the offending trade or trades will be bought in on T+1, with notice through customary channels.
* If a customer creates a second NSCC Illiquid Deposit Requirement greater than the $50,000 in a ninety day period, in addition to the buy-in, the customer account may be subject to closure for ninety days.
This is not a change Stock USA has made; rather, this change has been imposed by Penson in reaction to the NSCC's recent imposition of increased deposit requirements. As a result of this change, it is recommended that you refrain from selling large blocks of stocks priced less than $1.00. We apologize for the inconvenience that this change may present to some of our customers.
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