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Re: Frank0051 post# 863

Friday, 06/01/2012 7:10:55 AM

Friday, June 01, 2012 7:10:55 AM

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Frank, the 10% of 20-day ADV order size restriction on crap shell companies that Penson imposed never did any sense:

What the NSCC requires on illiquid penny stocks (on orders bigger than 10% 20-day ADV) is a deposit of (($0.01*number_of_shares)-trade_value) which is returned to the clearing firm after trade settlement at T+3.

It's only a small hindrance to the clearing firm as they'd miss 3-day interest charge on the funds they had to wire...but Penson did a knee-jerk reaction to that and chose to block the orders (BS policy) rather than charging interest charges on the wired funds to customers, at a 10% yearly rate or like that, a solution which would have let customers selling the shares and running away, rather than getting'em stuck in the account unable to do anything with them.

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