OTC Trading and Rule 15c2-11

This page is for discussion on OTC market trading as well as discussion relative to rule 15c2-11. Rule 15c2-11 is from 1971 and says that security issuers must have ‘current information’ on file, but allows the issue to continue to trade even when NO current information is on file.

Here is an article which covers rule 15c2-11 which was posted originally by 8675309xyz in the Sandbox on 8/27/2021.

55 thoughts on “OTC Trading and Rule 15c2-11”

  1. The plot thickens…….

    Just an FYI that I received a letter from Schwab regarding the new restrictions.

    The letter I received specifically mentions “my affected position” which is/was LTSA.

    What it does NOT say is anything related to LTSL or LTSH which I also happen to own both.

    Many have already discussed that Pfs and BBs might be going down different paths. I don’t know if they’ll be treated different after the rules take effect either way. I am just passing along what I received.

    If bonds continue to trade somehow, maybe we may get a little bounce? I am not relying on that happening, but this would be a pleasant outcome to the BB’s at least.

    1. LTSL and LTSH are also “closing transactions only” on the Schwab website. I think it was just a mistake in the letter.

  2. I know someone has mentioned it already but the OTC plans or appears to already have an “expert market” for the island of incoming 15c2-11 broken toys. I also read how the SEC said no way Jose in a different post here.

    What are the chances in just a year or so all of these pink no info securities go right back to trading as many of them have real value? That is the whole purpose of over the counter from day one in it’s most angelic form. So won’t they just end up on the “expert market” or the grey market? Then it is just a matter of us pushing brokers to make a list to separate the wheat from the chaff? Even if there is no bid/ask publicly available for us we can simply buy from previous levels we know are “excellent”, “good”, or “fair”.

    I just have a feeling that this might be a tempest in a teapot? That all these securities we call ills might not have much info available but pay like clockwork thus there should be some way for the man on the street to be able to purchase them. I cannot see the OTC not being all over this to make a way for this to happen. Or someone new steps in which is doubtful but not unheard of if regulations don’t strangle them to death.

    Or am I totally off base here?

    1. FC asks: “Or am I totally off base here?”

      FC, I think this is a “known unknown” that cannot be modeled or quantified. We are dealing with a US Government organization and I have heard rumors that sometimes they are slow to act, even if they are wrong. And my guess is that the brokers for the most part are NOT on our side. As I have stated before, we III’ers are maybe 1 out of 100,000 investors. We are absolutely, positively a pain in the rear for the brokerages. I did a rough look and saw less than 20 issues that we care about in the “Pink No Information” bucket.

      Knowing we are say 1 in 100,000, how much time and effort should a brokerage spend on helping us trade those 20 issues? Answer is ZERO compared to the more pressing issues that the other 99,999 people have.

      We all probably agree with the intent to prevent people from investing in totally fraudulent penny stocks. All of the reputable brokerages agree with NOT making those stocks available to investors.

      I think the range of outcomes is very wide:
      1) Extreme case is this is all “much ado about nothing” and all of these issues will be quoted and tradeable again in short order, say less than three months
      2) Opposite extreme case is they are NOT tradeable in our lifetimes and our heirs get to worry about it. Since all of us have different life expectancies we can fill in our own number of years here.
      3) Everything in between these two extremes.

      My own pure guess is that case 2 has the highest probability. For all of our accounts other than the possible corporate bond case, we have miniscule amounts of Pink No Info holdings. We did make a small allocation to LTSH/LTSL hoping they pay off at maturity, even if they remain untradeable until then. But is is a microscopic allocation.

      The corporate bond situation is potentially a big deal in one account that I discussed earlier. We have a major allocation to individual corporate bonds. And yes, they all eventually mature, so it is not the end of the world if they are untradeable until then. The account is not margined, so it is mostly a problem explaining to an 80+ investor why the account value dropped ~25% to 50% overnight.

      1. Someone on here mentioned earlier that they were aware of hedge funds or the like already being set up to take advantage of what they might possibly be able to do by being active in the “expert market” by creating a fund concentrating on the relative bargains being created in limiting the markets. Has anyone heard anything more about the creation of any of these funds?

        1. There’s not going to be an expert market for the No Info names since the SEC can’t be bothered to think about it. Remember this rule was a puff piece to make the SEC look good on consumer protection. they sure aren’t going to fix it now since that would mean admitting they screwed up the details and ignored the unanimous public comments criticizing the many flaws. Maybe the institutional lobby for the bond market will have better luck, but don’t expect their efforts to be applied to stocks or preferreds.

          And I would highlight that this issue is of much bigger importance than just the corner of the market involving impacted preferred stocks. There are thousands of “no info” common stocks, including hundred year old stalwarts like Boston Sand and Gravel (BSND), that are high quality companies that either don’t want the expense of paying OTCM for financials they can put on their website for free or otherwise should qualify for quotation but won’t because OTC markets has been made into a de facto regulator.

          1. Well we can all agree there exists an “expert market” at OTC. Just visit https://www.otcmarkets.com/research/stock-screener and select expert market under the drop down markets. Naturally grey is there to select as well.

            And once they are kicked off the pink the OTC wants them to end up on the expert market (maybe grey). I think we can all agree on that even though the SEC says they have not even given it any thought. Maybe not right away but they will go somewhere and those are the two logical places, right? You cannot restrict the public from buying and selling what they want. You just make it more difficult to do it properly with all your ducks in a row. Public bid/asks, who manages ownership so divs get paid, purchase history, etc…

            Since preferred often fall into fixed income.. like bonds.. they could possibly be included for the ride. Common? Who knows there. Your BSND is a great example of a common with value.

            I know this is all speculation but from reading the otc website it seems they will do almost whatever it takes to make most of this stuff tradeable. This is what they do after all.
            https://www.otcmarkets.com/learn/15c2-11-resource-center

            I quote from their webpage:

            “If OTC Markets Group is not able to confirm that a company’s disclosure is current and publicly available by the September 28th Compliance Date (e.g. those designated as “No Information”), those securities will move to the Expert Market for unsolicited quoting only.”

            It is like they will force the discussion to take place with the SEC. I know this discussion can go around in circles endlessly but the OTC is a nice partner to have on our side.

            As for what 2whiteroses mentioned I imagine they are. I am just a lowly retail investor but even I was trying to figure out how I can buy on the expert market. The big boys most likely will once they see the lay of the land and offer such opportunities to their accredited investors who are already approved. I doubt they need for me to sign up and approve me with my tiny resources compared to their existing clients.

            1. So is there actually any way to get qualified as a “sophisticated investor” to trade in the Expert Market?

              1. The whole accredited investor thing has some qualifications. The most straight forward way is having a million in assets not counting your main residence and minus any debt OR make more then 200K per year if you are single. I forget the exact income level you need to show year after year with the assumption it will continue. The rest are harder for us to qualify for. I forget if you need both to be YES to qualify. I don’t think so but I would have to reread it.

                There is no agency that monitors it. It is done by the organization you are dealing with. For example a hedge fund. They will determine if you are accredited or not. Your broker as well. Here is an example of a doc from td ameritrade. https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA3745.pdf If you search the doc for accredited you will see how it discusses it. They handle who is and is not and have you fill out the proper form.

                What I was hoping for is a specialized broker who will accredit us and allow us to buy from the expert market. So we can put up a bid/ask that the public cannot see and they handle all of the backend for us. Maybe one does not even have to be…

                So right now my tradeking account DOES allow me to sell expert market shares as well as grey. The thing is I have never had a reason to try it yet. There was nothing I wanted on it before or to dump. I have no clue if it would actually work. With all the rules changes taking place it is still a mystery to me. Could I have bought in the recent past? Obviously I can unload still when I see that message pop up saying “closing only”.

                I tested a symbol lookup with CCVAJ (grey) and SKAJ (expert). I can click on trade. The information I see is ridiculously sketchy looking when it comes to bid/ask. Almost like you can trust nothing you might see. It told me with SKAJ it is closing only so that means I could sell. It would not be very hard for them to allow buys possibly. After all the website said the same thing with OCESP but a simple call and approval got it done yesterday.

                I hope this helps. I do not guarantee anything is correct. I am still learning about this seldom used OTC area personally.

                    1. Uh oh… sounds like you may have just ended up on another Federal watchlist 🙂

                  1. Also worth noting on the subject of being accredited, the proposed House tax bill will forbid IRAs from owning anything that has investor requirements such as being accredited. Existing holdings are not grandfathered and must be sold or distributed within two years or the IRA status is revoked.

                    https://www.ropesgray.com/en/newsroom/alerts/2021/September/Large-IRAs-and-High-Income-Retirement-Savers-Targeted-by-Amendment-to-Budget-Reconciliation-Bill

                    Now maybe you could argue you can own these preferreds anyway without being accredited, you just had to be accredited to make it easier to buy them if that Expert market ever shows up. But just be careful because anyone with a decent IRA is a clearly target.

                    1. xerty – Do you happen to know who’s supposed to be responsible for definitively identifying which securities officially fall into that category of being non-qualified for IRAs?

                    2. So shares such as AATRL and the CoBank preferreds that have fallen into a gray area where they trade like any other issue now though were originally 144 will remain in a gray area until they’re not and that could be 5 years and potentially many tax dollars and penalties fees later. We here on III probably know some or most of the names that might be considered questionable in the future under this if it’s adopted, but I bet the majority of current owners haven’t a clue. But of course, nothing’s going to be clarified for anyone upon adoption…. You gotta love Govt, don’t you!….

                    3. @xerty, the IRA size maximum and required 50% distribution of excess will lead to a nightmare tax year. I haven’t seen any avoidance strategies either.

                    4. As written, this would be a horribly unpractical rule. First off, investors don’t know which securities would fall under the rule – even looking at my own portfolio, I’m not sure if I have any such holdings. Invalidating an entire IRA for something you may have bought years ago is grossly unfair. Not to mention that if you have no way of selling the security, pretty much your only logical choice to save the rest of the IRA would be to distribute the security to your after-tax account, but they say you can’t do that, either! So this looks completely unworkable. If they want to put on a new restriction going forward, that’s fine, but I really don’t see how this can be applied retroactively.

                    5. Qniform – the proposal is still not passed or final, and things may yet change. The IRA maximum rules I find quite offensive and I say that as someone well shy of being impacted. Punishing success used to be unAmerican, and the original taxes paid on Roth conversions were paid in good faith for a lifetime free of RMDs per the present laws. This is the politics of envy and are aimed at under 500 successful and/or lucky investors.

                      https://www.bloomberg.com/news/articles/2021-09-16/roth-ira-how-the-richest-americans-use-retirement-accounts-to-avoid-taxes

                      “More than $279 billion sits in mega-IRAs, individual retirement accounts with at least $5 million each… nearly 500 of them somehow managed to get $25 million or more into their IRAs.”

                      “Somehow”? You don’t end up $25M in your IRA by accident. You either paid a ton to convert balances from years of high retirement savings and/or DB plans, or your invested very well, or both. Here’s one of Buffett’s guys who did very well for himself by picking good stocks.

                      https://s3.documentcloud.org/documents/20971124/ted-weschler-statement.pdf

                      “Somehow” sounds like the same guys who look at your life’s work starting a company and say “you didn’t built that”. Tomorrow, the incentives might be such that you wouldn’t bother.

                      Meanwhile, if you have a huge IRA and they do pass the law as proposed, you just need to stop working entirely and move to munis and non-dividend stocks to cut your income down to nothing. The proposal only applies the IRA RMDs for large accounts in conjunction with high AGIs (although being unable to continue this low income approach for even a single year could be very very bad).

              2. I called Schwab and was told there is no way at this time to be able to bid on these securities. Doesn’t matter if you are accredited, sophisticated, or any other adjective. As is always the case when you call a brokerage firm, there is no guarantee that is the right answer, but that’s what I was told today.

            2. The trouble with many like BSND, is this rule has no bearing on them at all. They went dark a long time ago, and on purpose. Only a few people control the float and it serves many purposes for themselves. Its a great company, but this issue is of zero concern to them.
              I bought about 25 shares a few years ago just to get a copy of the financials. They give it to shareholders. I have since sold as I bought it for amusement and a quick small gain. But these types of companies (and there are several on OTC) are self dealing and could care less if they ever trade publicly.

            3. Fc – yes, of course OTC Markets would like everything to continue to trade, not the least of which is because they run an otc exchange where they get fees from each trade that happens on there (OTC link, although trades happen elsewhere too). But they can’t do anything but ask nicely and the SEC has said it’s not a priority, and more to the point, this misguided protecting the customer from trading low tier OTC securities is a higher priority. They may never take up the Expert Market accredited investor quote visibility proposal.

              Yes, these no info issues will end up Grey or Expert. Right now Expert vs Grey is a distinction without a difference – it’s basically Grey in that there are no quotes, but instead of being kicked down to Grey for getting an SEC suspension, Expert is reserved for those few stocks that got slapped with Caveat Emptor status for being a pump and dump or a fraud. It’s a bit easier to come back from, ie if the promotion wasn’t done by the company and after it’s over they’ll got back to Pink and quoted, but otherwise it’s just as bad. There are only about 100 Expert market names vs 1000s of No Info ones.

              “ You cannot restrict the public from buying and selling what they want. “

              But they can lean in the brokers to encourage them to ban trading in these stocks and have successfully done this to most retail brokers. TDA, Schwab, Etrade, Vanguard, Fidelity, and IB will not all purchase of most of these securities and after the new rule kicks in, I would be surprised if ANY of them will allow purchases.

              In addition, FINRA or the SEC can threaten expensive compliance audits related to otc securities. These are not idle threats – they have big costs in terms of additional required compliance personnel and if anything isn’t don’t exactly right there will be 7-8 figure fines assessed. Given the low trading volume in most otc issues, it doesn’t take much pressure on this front to make it non-economic for the brokers to support Grey market trading even if the regulators can’t legally outlaw it.

              That’s where we’re going. Grey market is where stocks go to die. Once the liquidity is gone because the market is so terrible and nearly everyone can’t place orders on it, then it won’t be worth anyone’s effort to save because they’re getting paid on future volume (either as brokers or as the exchange).

              I’ll be happy to be wrong, but I think all these No Info issues will basically be private equity whee there are a couple brokers who will charge you 10-20% spreads to line up a buyer or seller if you’ve got a big block of stock. Otherwise, buy and hold!

      2. Tex, are most of your bonds in unlisted companies? Seems pretty unlikely, so I’m not sure why you would think there’s any chance of 25-50% of them being priced at zero. Not to mention that the bond market doesn’t operate like the stock market and bidders should not disappear. And then not to mention that most brokerage firms don’t actually value bonds based on actual trading of a bond (because there often isn’t any), but based on models comparing the bond to other comparable bonds. So I don’t think there should be much concern of some huge devaluation.

  3. This could have been posted on the illiquid board, but it likely fits here:

    AWRY (Allegheny & Western Railway Co.) $100 face value, 6% coupon yield just hit close to 5 year low today @102.00, down 15% from 120.00 traded last Thursday 9/16. it was the biggest % loser today amongst>$10 preferreds/babys/terms. 295 shares traded @ 102, so no way of knowing if any more are offered at that price. This is a “Pink No Information” issue so trading is a even more challenging than a regular illiquid. As with all of the other Pink No Information issues, we really do NOT know how this will be handled in the future. Your heirs might be stuck with it being unsaleable

    My assumption is that this was fire-selled because someone did NOT want to take the untradeablity risk.
    We do not own it in any accounts or have any open orders.

  4. Is anyone aware of any kind of work around? I’m wondering who is buying these. I see shares moving on these restricted issues. Thanks

    1. Dick – I’ve been able to buy two of these restricted issues in the past week, but only by trial and error. One small company is not supposed to be trading and Fidelity, Schwab and Vanguard won’t let me trade it. However, TD is still allowing me to buy shares, although I am unsure why – because it was on their restricted list. They charge me $6.95 per trade. I continue to have a “low-ball” order in for this security as there are still a few sellers.

      Also, by pure luck, I had an open order at Schwab for one of the securities on the list when the restrictions went into place. Schwab will not allow me to place a new order, but for some reason allowed the old order to stay open. Today I bumped up the price on the old order and hit some shares at a pretty good price.

      The other possible “loophole” is opening up an account at one of the brokerage firms that acts as the Market Maker for one of the securities on the list and they may allow you to purchase shares. I’m not taking this route yet, as the fees they charge will likely be expensive, but it may be an option for me down the road. Hope this helps.

  5. “It Was Fun While It Lasted” Dep’t., from Ally Invest:

    You currently hold securities that may be impacted by recent amendments to SEC Rule 15c2‑11, effective September 28, 2021. The amendments change when and how securities not traded on a national securities exchange (i.e., OTC securities) are quoted. Due to these changes, Ally Invest will no longer be able to accept new opening transactions (i.e., long buys or short sells) for affected securities after September 24, 2021. You will still be able to close existing positions for the time being. Please note: The amendments could impact the price and liquidity of these securities.

    The affected securities are subject to change. A current list can be found here: OTC Liquidation Only https://bit.ly/3Cqv5mX

    For more information on Rule 15c2-11, please consult the OTC Markets Resource Center. https://www.otcmarkets.com/learn/15c2-11-resource-center

    1. I did not see any of the Ladenburg Thalman Financial Services, Inc. issues on the Ally list:
      LTSA the pfd, or the senior notes LTSK 7 1/4 s 28, LTSF 7s28 or LTSH 7 3/4s 29. Any opinions?

      1. David, unfortunately, I dont have an opinion, but a fact. They are on that list. Go down to either page 57 or 58 (that is what my ipad is showing) and you will see them all. I think you only went through the first A-Z. There is another alphabetized list after the first one.

        1. Hi Gridbird,how much affect will this have on the old Alabama and Ameren preferred? Thanks B/L

          1. Hey Big Lou. There should be zero impact. Those companies report their subsidiary earnings in SEC so shouldnt be a problem unless OTC gets a hissy from them not paying them anything.
            I only have 2 presently going to the dark, but I do worry about issues such as CRLKP, SLMNP, and a few more obscure ute preferreds I own going that way if rules are interpreted differently or OTC wanting extraction fees.

    2. I just bought OCESP today using ally. You just had to call and get the purchase approved. It is on the list. I am typing this here just to document the fact. I think we have until this Friday to buy anything else. Pretty much everyone here knows what went on with OCESP today but who knows if anyone else googling around might come upon it and find it useful. It appears that letter which went out was for the website itself to start. Not a call in. Eventually too that will end.

  6. The Washington Post is out with an article today on how 15c2-11 will affect bond trading:

    https://www.washingtonpost.com/business/a-big-bond-market-headache-courtesy-of-the-sec/2021/09/16/0fcbd9fe-16de-11ec-a019-cb193b28aa73_story.html

    A Big Bond Market Headache, Courtesy of the SEC
    From the article:
    “There’s one big problem: The rule, which had long been understood to safeguard retail investors from penny stocks and other “pump-and-dump” schemes, doesn’t explicitly exclude fixed-income assets, except for municipal bonds. The Bond Dealers of America, a trade association for securities dealers and banks specializing in fixed income, says SEC staff have informally confirmed that the rule applies equally to both equities and debt.
    “The industry is mildly freaking out,” Kevin McPartland, head of research in Greenwich Associates’ market structure and technology group, said in an interview. Firms must be compliant with the amendment on Sept. 28. “Dealers can’t operationally make that happen in that span of time. If nothing changes, at the end of the month they may have to stop quoting some bonds,” he said.

    To get a sense of the level of panic, look no further than an Aug. 6 joint letter from the Securities Industry and Financial Markets Association and the BDA, which are seeking an exemption:

    “We are concerned that the rule as written could apply broadly to quotation activity for fixed income securities, and that the application of the rule to quotations for fixed income securities will deter that quotation activity in a way that will have a significant, deleterious effect on the fixed income markets. We believe that such an application of the rule is overbroad and unnecessary and will increase costs, decrease liquidity, and reverse the gains in transparency that the fixed income markets have achieved in recent years as the market has become more electronic.”

    Throughout the letter, the BDA can barely hide its incredulity at the whole situation. The group summarizes its position like this:
    “The bond market simply is not the high risk, low transparency world of microcap stocks. Moreover, applying the Rule to fixed income would increase compliance costs for dealers, which ultimately would be reflected in higher transaction costs for investors. Finally, adding additional requirements before a firm can provide a quote or execute a trade for a customer could discourage firms from quoting certain securities altogether.”

    As far as I can tell, this looming compliance headache hasn’t been discussed much anywhere, aside from these letters. That’s likely because bond traders assumed the SEC couldn’t possibly have intended to rope mortgage-backed securities and junk bonds into its Exchange Act Rule 15c2-11, given the gigantic size of those markets relative to a few hundred thinly traded stocks. Yet for now, that’s exactly what it’s doing.

    “Until April of this year, I’ve never paid attention to this rule because this was not a fixed-income rule,” Michael Decker, the BDA’s senior vice president of federal policy and research, said in an interview. “The SEC has now taken the position that the rule already applies to fixed income and it has always applied.”
    …“I don’t think the SEC has thought through this,” Decker said. In light of Gensler’s recent remarks, “it’s wise for everybody to take a few steps back, think about what enforcement policies will look like.”

    An SEC spokesperson didn’t reply to an emailed request for comment.

    It would be shocking if the SEC fully ignored the concerns of the BDA and Sifma, especially after Gensler made a point to highlight that non-Treasury fixed-income markets are “so critical to issuers.” Even if the regulator stops short of granting a full exemption of all fixed-income securities, it could at least push back the compliance deadline to avoid any risk of dealers pulling back on their bond trading while waiting for guidance. The joint letter from the two organizations hints at such a compromise solution, which would narrow the scope of debt covered by the rule. It’s also possible that the SEC will simply choose to look the other way at bond trading — Decker said he’s not aware of any enforcement action ever taken against fixed-income dealers because of 15c2-11.

      1. One day I might take a trip to McPartland. I heard it’s like Graceland for Preferreds and BBonds. I heard even WTREP makes a surprise appearance!

    1. Re “As far as I can tell, this looming compliance headache hasn’t been discussed much anywhere, aside from these letters….”

      The WP author should come on over here to III 😉

      1. Bur Davis,
        The article is specifically about the impact to bond trading, not stocks. As far as I know, the impact to bond trading has NOT been discussed here and I didn’t realize it would apply. I agree with those quoted in the article that the logic for the rule in the stock market doesn’t makes sense in the bond market.

    2. Applying 15C2-11 to corporate bonds would be very problematic. One case is for any kind of leveraged account, it you suddenly take money good bonds and value them at zero, it might force a margin call and some fire sales. But you would presumably not be able to sell the zero valued bonds and have to sell the properly valued ones. Would be a real mess.

      The other situation is also problematic. Even if you have a non-margined account that holds bonds written down to zero, it can other problems like cross defaults. One of the accounts we manage is for an 80 something person with a substantial account. We hold many, many individual corporate bonds instead of ETF’s to achieve the desired stock/bond allocation. Going to be hard to explain how the account suffered massive losses overnight and what implications it has. Hope it does not cause a heart attack when they see the account balance the first time.

      Baby and bath water for sure. . .

      1. Tex the 2nd: The Bond Dealers of America (“BDA”) and the Securities Industry and Financial Markets Association (“SIMFA”) agree with you. Here’s a draft copy of a joint letter they sent to the SEC (I pulled it from that Bloomberg article republished by the Washington Post posted earlier today – I asked the Bloomberg reporter if he had a final copy; haven’t heard back yet).

        https://bit.ly/2ZasC1R

        From page 10:

        II. Exemptive Relief Sought
        Based on the above, we respectfully request that the Commission issue an exemptive order excluding quotations published for fixed income securities from the scope of Rule 15c2-11. We request that any security that is a debt security and any non-convertible preferred stock, collectively referred to herein as “fixed income securities” be included within the scope of the exemption.
        +++++
        Wouldn’t it be *great* if the SEC listened to ’em?

      2. Tex the 2nd,
        Massive losses overnight in a IRA account would be the perfect time to convert it to a Roth? I have been wondering if anybody has thought of a way to pull this off.

        1. 35spline, we plan to do exactly that if they value equities at zero. We bought a small allocation to LTSH/LTSL in several IRA accounts. If they write them down to zero, we will transfer the positions to existing ROTH accounts. We did a lot of this in March 2020 during the COVID crash. No position had collapsed to zero, but we took the ones that were down the most and converted them.

          I just checked and ~ 99% of the individual corporate bonds we own are in taxable accounts, so even if they zero them out, we will not be able to convert them to ROTHS. If you have a cash balance, you could go buy some short term corps in IRA’s just on the chance they get written to zero. That is not as easy as it sounds, since many short term corporates (and munis and CD’s for that matter) have ask prices with negative yields to maturity. I would not want to buy something knowing you are going to lose money unless you had a high probability of it getting a zero value. . .

          If any III’er has a larger allocation to these stocks in an IRA, they would be the ones that could get the maximum benefit. Hopefully we have very low allocation to these in all of the IRA accounts we manage. But in today’s crazy world, we might wake up one day and have some surprises.

          I will post if and how it works.

          Totally unrelated but kind of interesting is that Congress is working on a “Peter Thiel” ROTH tax bill as part of the $3.5 Trillion spending package. They are upset that Peter’s ROTH is literally worth $20 Billion. He put founders stock valued at pennies in it and grew just a little. This was one of the tax facts that was illegally leaked to ProPublica a few months ago. So they are writing new laws to force him to pay tax on some of it. And yes at some point in the future, they could decide to tax ALL ROTHS.

  7. Since Schwab no longer allows buy orders for the 15c2-11 issues. Is anyone familiar with another broker who will until September 18? LTSA.

    1. Someone here said that TD will be through (or until?) September 4. Not sure if any will allow buys to September 18.

      LTSA does look tempting today. I have a decent amount of LTSL but no LTSA because I want a maturity date in case there is no liquidity in the future. I do have an account at TD that I could potentially buy LTSA, but I’d have to sell something else first. But the covenants on LTSA just aren’t that great for a preferred stock that I might never be able to sell at a reasonable price, so odds are I’m not going to pull the trigger. This is not a low risk company so the prospect of being trapped in a non-paying security is real.

    2. IBKR is currently allowing buy orders in all LTS issues, and as far as I’m aware, there’s been no notification that they will be disallowing them anytime in the future.

      1. TD said these issues will be restricted “on or after” Sept. 3. Ally presently has no restrictions.

  8. I have a few stocks on the list that will not be available to be traded soon, so I’m glad this comment section was opened up. Schwab has pretty much closed these down, but TD is still allowing trading until the close of business on Friday. Not sure how this will work out in the future, but I have a number of open orders on TD. They do charge $6.95 per trade on some of these issues, but well worth the price if you like a company that you believe is trading well below the actual value of the assets.

  9. I asked TDA to check on IVREF, Inovalis Real Estate Income Trust, a Canadian Reit, which trades on the GREY market. They replied it is not on the restricted list and so still trades , even though it isn’t listed as ‘financial info posted’. So, be careful , because there does not appear to be any consistency as to which issues will be able to be traded ( or even sold ). I held same and sold because I don’t want to be stuck with a product, but will rebuy after Sept 28 if it is still tradeable.

    1. The REIT looks interesting. Will investigate further. I, too, did not see it on the latest restricted list put out by TDA.

    2. “Inovalis Real Estate Investment Trust Announces Distributions for September, October, and November 2021
      Not for distribution to U.S. news wire services or dissemination in the United States ”

      Time to call IBKR…

    3. The F (or Y) foreign otc tickers have somewhat different rules under this SEC change. If they make appropriate disclosures in their home market, that can be enough to allow continued quoting as otc here. Whether OTC Markets notices that or not is another question.

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