Will SEC ban otc pink stocks no information from being traded with retail broker ?

The ban is to pink no information stocks.
"The Pink No Information category is for companies that are unable or unwilling to provide disclosure of any kind to the public markets. They either provide no information to OTC Markets, or the information available is more than six months old."
 
zdreg said:
The ban is to pink no information stocks.
"The Pink No Information category is for companies that are unable or unwilling to provide disclosure of any kind to the public markets. They either provide no information to OTC Markets, or the information available is more than six months old."
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more than 4000 stocks will be banned. Most pink sheets are no information.

market makers will lose a lot of money as it will be impossible to close their positions with order flow dump money
 
Lots of nanny brokers have been banning trading in various types of OTC and even occasionally listed stocks, solely based on the (sometimes inaccurate) OTC Markets classifications such as “no info”, “shell”, “caveat emptor”, their subjective interpretation of if someone might have been promoting the stock online, or whatever nonsense their compliance department feels nervous about that day.

fidelity started the trend years ago of telling you they know better than you what you should be allowed to trade, but since then Vanguard, Etrade, TDA/Schwab and IB have all followed suit to varying extents. Personal responsibility is out, and massively destroying shareholder value for the unimportant people who own these effected securities is a small price to pay for the SEC getting to issue a feel-good press release.

https://www.sec.gov/rules/final/2020/33-10842.pdf

note that even if a company provides financials, OTC Markets will ban them from trading if they don’t pay OTCM for the privilege of posting those financials on the OTCM site. The law just requires public disclosure, such as on the company website, but how will OTCM make any money off of that?

Sig said:
Requiring that a company actually exist before it's stock can be traded.....crazy!
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You obviously missed the SPAC mania of the last year. First you make the stock, then you figure out the business you’ll be in. Interestingly that new SEC rule bans shell companies from being quoted after 1.5 years regardless of if they provide full financials, so I wonder if in a few years, all the SPACs will have to get their deals done faster than the current 2 years plus some optional extensions. No one will want to invest in a SPAC deal where the stock basically can’t trade.
 
MoreLeverage said:
Lots of nanny brokers have been banning trading in various types of OTC and even occasionally listed stocks, solely based on the (sometimes inaccurate) OTC Markets classifications such as “no info”, “shell”, “caveat emptor”, their subjective interpretation of if someone might have been promoting the stock online, or whatever nonsense their compliance department feels nervous about that day.

fidelity started the trend years ago of telling you they know better than you what you should be allowed to trade, but since then Vanguard, Etrade, TDA/Schwab and IB have all followed suit to varying extents. Personal responsibility is out, and massively destroying shareholder value for the unimportant people who own these effected securities is a small price to pay for the SEC getting to issue a feel-good press release.

https://www.sec.gov/rules/final/2020/33-10842.pdf

note that even if a company provides financials, OTC Markets will ban them from trading if they don’t pay OTCM for the privilege of posting those financials on the OTCM site. The law just requires public disclosure, such as on the company website, but how will OTCM make any money off of that?


You obviously missed the SPAC mania of the last year. First you make the stock, then you figure out the business you’ll be in. Interestingly that new SEC rule bans shell companies from being quoted after 1.5 years regardless of if they provide full financials, so I wonder if in a few years, all the SPACs will have to get their deals done faster than the current 2 years plus some optional extensions. No one will want to invest in a SPAC deal where the stock basically can’t trade.
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It is the same nanny nonsense in NYC real estate where owners of commercial property would be penalized if they didn't rent out their property. Covid-19 ruled out passage of that nonsense.
 
MoreLeverage said:
Lots of nanny brokers have been banning trading in various types of OTC and even occasionally listed stocks, solely based on the (sometimes inaccurate) OTC Markets classifications such as “no info”, “shell”, “caveat emptor”, their subjective interpretation of if someone might have been promoting the stock online, or whatever nonsense their compliance department feels nervous about that day.

fidelity started the trend years ago of telling you they know better than you what you should be allowed to trade, but since then Vanguard, Etrade, TDA/Schwab and IB have all followed suit to varying extents. Personal responsibility is out, and massively destroying shareholder value for the unimportant people who own these effected securities is a small price to pay for the SEC getting to issue a feel-good press release.

https://www.sec.gov/rules/final/2020/33-10842.pdf

note that even if a company provides financials, OTC Markets will ban them from trading if they don’t pay OTCM for the privilege of posting those financials on the OTCM site. The law just requires public disclosure, such as on the company website, but how will OTCM make any money off of that?


You obviously missed the SPAC mania of the last year. First you make the stock, then you figure out the business you’ll be in. Interestingly that new SEC rule bans shell companies from being quoted after 1.5 years regardless of if they provide full financials, so I wonder if in a few years, all the SPACs will have to get their deals done faster than the current 2 years plus some optional extensions. No one will want to invest in a SPAC deal where the stock basically can’t trade.
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I obviously grasp the difference between a SPAC and a company that went bankrupt 10 years ago and hasn't existed in any way, shape, or form since, which made up a decent number of the OTCBB traded stocks. So does the SEC, that's why Rule 15c2-11 applies to OTC BB stocks and won't impact SPACs that are listed on exchanges. Any OTC BB SPACs that exist out there are as likely to be scammy as the rest of the shell companies and no-one is worse off if they can't trade except the scammers.

Given that brokers have some liability from allowing trading in clearly non-existent companies, it requires a decent amount of effort to distinguish in OTC BB, and allowing trading in these companies is generally a pain in the ass that contributes basically nothing to their bottom line, not only are they under no obligation to offer it on every name but it would be crazy for them to do so. This isn't a "personal responsibility is out" "nanny state" issue, it's a free market, companies get to do what they like and shouldn't be forced to perform a certain line of business just because a small group of people really want to trade penny stocks issue. You think differently, start a brokerage yourself and make money hand over fist off all the business you think they're foolishly turning down. And seriously, "massively destroying shareholder value for the unimportant people", hyperbole much? The massive destruction of value in OTC BB comes from scammers. I'd be curious to hear the detailed story of just one of these apocryphal poor little "unimportant people" who lost all this value from the big bad brokerage firms and SEC?
 
Buy a shell, back your scam into it, reverse split stock if need be, deposit stock via phony legal opinion, Issue fakish press release, have accounts held by your boys mimic volume and sell into the noise, wire money out. Rinse repeat.
 
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