OTC Trading and Expert Market

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.

Here is another more official resource as posted by Justin on 9/27/2021.

This item was posted by AzureBlue on 8/15/2022

OTC Blog discussion on expert markets.

312 thoughts on “OTC Trading and Expert Market”

  1. Does anyone here know how to determine the unique number of individual stockholders for any given series of preferred shares? As far as I can tell, this information isn’t made publicly available.

    As many of you have noticed, there have been a recent raft of take-private proposals that could potentially affect the preferred shares of the company that is taken private. I am trying to figure out a way to avoid getting “GMLPF’d” – that is, having the preferred shares removed by an Exchange due to an inadequate number of preferred shareholders (that’s what happened with GMLPF, which was delisted from the NASDAQ Global Market due to an inadequate # of stockholders). With the delisting comes, of course, illiquidity, due to the unfortunate and unforeseen aspects of SEC Rule 15c2-11.

    I am thinking here of SiriusPoint, Triton International, and the GasLog Ltd. / GasLog Partners preferred shares. If, say, Dan Loeb successfully consummates his take-private of SiriusPoint, could the SPNT-B shares be delisted by the NYSE (of its own volition, following its own rules) due to an inadequate number of SPNT-B stockholders?

    I have called and emailed the “NYSE Listed Companies” contacts (https://www.nyse.com/contact) but not heard back.

    Thank you!

    1. Keep in mind “going dark” “delisted” and “expert market” are not the same thing. I own “delisted” issues that are neither “dark” nor expert market. I also own a “dark” preferred that is delisted but not on expert market. So the terms are not synonymous.
      Just as a stand alone comment all shareholders holding in street name are generally viewed as one shareholder per brokerage.
      This explains it a little bit in terms of a company wanting to go dark…
      Both U.S. domestic issuers and foreign private issuers can delist and/or deregister if there are less than 300 holders of record of the relevant class of its securities as defined in Rule 12g5‑1. It is possible for a company to have less than 300 holders of record of a class of securities even though it has thousands of beneficial owners of that class of securities. This is because, in counting record holders, in general, the issuer need only count the number of registered holders on its shareholder list and if depositaries are listed, the number of holders for whom the depositary holds securities. For most U.S. issuers, this mean counting the registered holders and adding the number of participants listed in the security position listing of DTC, the principal depositary for U.S. issuers.5 For purposes of determining whether the Company has less than 300 holders of record, Rule 12g5-1 has been interpreted to mean that an issuer does not have to further “look through” DTC participants to the ultimate beneficial owners. Many companies may therefore be eligible to delist and “go dark” without management or the board of directors even being aware of the possibility.

      1. Grid, how do you distinguish among “delisted”, “going dark”, and “expert market”?

        1. Bur, Delisted is any issue that is removed from one of the exchanges and typically (though some baby bonds go to the $1000 bond desk as $25 baby bonds) goes to the OTC. Not everything on OTC is a “delisted issue” though. Some were private placed issues that got OTC tickers assigned and just trade there. For example FIISO is an OTC pink sheet that never traded on an exchange even though its common stock parent FISI does.
          Expert market is just a subsegment of the delisted issues. These cannot be traded (for reasons we all know) because the company will not report financials to OTC. If company provided delisted financials to OTC they would trade on the “OTC Pink Sheets”. Many companies provide OTC their financials so they trade freely. Many also (such as Ameren and Eversource subsidiary preferreds) freely trade on pink sheets because holding company does release financials through SEC filings despite the subsidiary preferreds being delisted.
          Concerning “going dark” and “private” the differences are a bit more nuanced. A private company in my personal terms is one that has no public tradeable common stock. Going dark means a company wants to get under shareholder limit threshold to delist their companies common stock with the intent of going “private”.
          If a company goes dark there still are some minimal shareholder protections such as right to companies financials if a current shareholder. Typically a company that goes dark is insider led, or family led where they control the votes to get this done. Theoretical worst case scenario for a company going dark is to feed the pigs at the trough and not maximize earnings per share. Such as deals done with other affiliated family companies that may benefit more the other family enterprise than itself, or hiring the lazy child a 6 figure salary to do nothing but get him out of the house, lol. In other words if you own shares of a dark company your interests and controlling entities interests may not be aligned at all.
          Some companies trade OTC through an SEC exemption created close to 100 years ago. This company only is on OTC just as a courtesy to shareholders as they were SEC exempted from having to be on an exchange.. Ever heard of this company? At $500 plus a share it has to have some worth in it, ha.


            1. There are some neat stories on a few OTC companies. Another one is Boston Sand and Gravel. BSND
              It went to expert market and they dont give a sh!§£. It has been around over a 100 years and its site has been used to film scenes in Batman, The Town, and Equalizer. Look at this pic below..The city of Boston’s highway system was built around it.
              I actually owned about 10 shares maybe 4-5 years ago at about $300 a share. I wanted to see their financials and they sent a nice little glossy without asking. I really screwed up and I should have kept them because they are now paying a $100 a year annual dividend. Boy the SEC is really saving people from owning such a crappy company, ha.

              1. Just saying.. but boston sand and gravel is not overlooked by anyone with an eye for industry. It is probably the most well known due to their large yellow sign by the highway. But anyway..

                The more interesting question is can preferred ocean spray owners request Financials? Or only common?

                1. If you find it more interesting maybe consider shooting them an email and find out. Maybe Kate can help you.

                  For corporate, business, trade, and financial media inquiries, contact:

                  Kate Leonard
                  Director, Global Corporate Communications and Culture
                  Ocean Spray Cranberries, Inc.
                  One Ocean Spray Drive
                  Lakeville-Middleboro, MA 02349
                  Email: Comms@oceanspray.com

            1. The Aztec Land & Cattle Company! Wow, there is a name I haven’t heard in decades.

              When I was a kid, I helped herd cattle on their land. Never occurred to me that they were a public company.

              I might have to buy a share just for nostalgia. I wonder whether I could get them to issue a paper certificate to hang on the wall?

    2. Also added thought I forgot to mention. Based on my understanding, a company going dark is not the same thing as going private.

      1. Thanks, Grid, for complicating a simple question! Let’s use a real-world example. SPNT and SPNT-B are listed on the NYSE. Let’s say Third Point LLC / Loeb takes the company private and delists and cancels the common shares. How can you tell if the preferred shares would be delisted *by the NYSE* for failure to comply with their minimum listing standards?

        The NYSE “Continued Listing Criteria” are specified here:


        802.01 and 802.01A state that “The Exchange would normally give consideration to the prompt initiation of suspension and delisting procedures with respect to a security of either a domestic or non-U.S. issuer when:
        802.01A.Distribution Criteria for Capital or Common Stock (including Equity Investment Tracking Stock).—
        •Number of total stockholders (A) is less than ____________________400

        So far, so good – if the number of total stockholders is over 400 after the common shares are delisted and canceled, there’s no automatic delisting of the preferred shares by the NYSE.

        The same rule also provides that “(A) The number of beneficial holders of stock held in the name of Exchange member organizations will be considered in addition to holders of record.”

        When the common shares are delisted and cancelled, the preferred shares become the primary NYSE listing. So how does one figure out how many individual unique preferred stockholders there are to assess the risk of a delisting by the NYSE, “sua sponte”, or on its own?

        That’s what I’m trying to get at. Not what happens to the (say) SPNT-B shares after a potential NYSE delisting (they could go to OTC Pink and stay liquid, or they could go to the expert market and dry up , just as you suggest).

        Outside of asking the company for the information, are unique shareholder numbers publicly available anywhere?

        1. ES, Sorry, but I have hung around 2Whiteroses too long, lol. I have got this way I guess because people (not you) get delisting and expert market mixed up to meaning the same. In terms of delisting from 300 shareholders, if every shareholder is in street name as my blurb alluded too, they are likely well under the threshold. They actually dont even have to dig further than that.
          Oddly enough some reporting OTC delisted issues actually give you pretty accurate counts. Take SOCGP as an example. Note they report over 1100 entities owning this security.
          Of course a lot of scenario’s could occur besides maintaining requirements and staying on NYSE… Even if somehow it got delisted they could report financials to OTC and it would trade fine on pink sheets.
          The blurb and link I gave above shows the reporting process one must go through. Granted its a bit heavy. But bottom line, there are 2 ways to an “accurate” share count. The way listed above where every shareholder under a single brokerage in street name is considered just 1 entity…Or you can poke deeper but it doesnt have to be done though. In fact a preferred I own specifically mentioned that. They got under 300 by redeeming any person with less than 300 shares or so not held in brokerage account. As they stated they all only counted as one person anyways and thus didnt force a tender on those people.

          1. Hey Grid – We’ve all got ’em (and I’m not talking about belly buttons) but only the most special amongst us are retentive about ’em…. lol

            1. 2WR, Have you considered rolling out of your GJP into more GJT? I just dont see the downside. You get higher yield and a better quality rated bond backstopping the synthetic adjustable. And if for some reason the counter party swaps were terminated you get a better YTM with underlying bond. And if redeemed you get the better sized cap gain. I dont see any advantage GJP has on GJT unless you see something Im missing.…GJP has a 35 bps higher adjustment, but that is more than negated by the $3 plus price differential.

              1. Grid – What you’re missing is I don’t own either one nor have I ever but will take a look….. I own GJO (Walmart) and that one’s based on 3 mo LIBOR not 3 mo treas…. That’s truly sock drawer to me. I gladly pay no mind to it and continued to own it in ZIRP days when it made no sense to continue holding Now at least it does make sense…. I’ve never owned either of GJP or GJT but I do also own GJH (US Cellular). It’s been doing poorly recently but YTM I suppose is not out of line high or low for what it is.

                1. Ok, Im sorry I forgot. I thought you owned GJP not GJO. That ‘splains it then. Too many G’s for me to remember.

        2. Im sure you could contact IR and they would give you the info. Though its probably the method I referred to which would understand the actual amount. TFIN in their annual meeting announcement (below) actually mentioned their shareholder number, so they are aware of at least what the minimum number is..
          As of February 27, 2023 we had 23,318,730 shares of Common Stock outstanding and entitled to vote at the Annual Meeting, and our shares of Common Stock were held by approximately 269 stockholders of record. Each stockholder of record of Common Stock on the record date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting. There are no cumulative voting rights in the election of directors.

          1. Gridbird wrote: “I’m sure you could contact IR and they would give you the info.”

            Simply FYI, asking IR for the # of unique shareholders was the first thing I did – I sent emails to Joe Nelson (head of IR at Gaslog Ltd. / Gaslog Partners) and to Dhruv Gahlaut, Chief Strategy Officer & Head of Investor Relations at SiriusPoint – but neither one has replied, and it’s been a full week in both cases. I suppose they feel no obligation to respond to me as a preferred shareholder (not a common shareholder) in both cases.

            I’ve also scoured the SEC filings looking for these numbers and struck out in both cases. SPNT is holding its annual shareholder meeting soon, and you’d think that information would be in the annual report, but if it’s there I couldn’t find it.

            All this makes me think that I am probably missing something, and my perception is that this is not something other people seem to be worried about, which adds to the concern that I’m paranoid about something that others aren’t. But these days, with 15c2-11 being what it is, getting GMLPF’d (getting removed from an Exchange, by the Exchange) is something I’d really like to avoid.

            Thank you, Grid, for the link to the SOCGP shareholder count numbers. This means these numbers exist somewhere and that it’s a matter of tracking them down. I wonder if unique shareholder numbers are available on a Bloomberg Terminal? 😉

            Speaking of Bloomberg, there’s a fascinating article in this week’s FT Magazine, “Bloomberg is contemplating life without its founder”. Here are a couple choice quotes:

            “It may not be as glamorous as many other corners of the technology world, but Bloomberg terminals have become an essential part of any self-respecting bank or investment group’s toolkit. Some executives insist on having their own as a condition for accepting a job offer. “I’ve been married to the Bloomberg terminal for longer than I have my wife,” says Steve Sosnick, chief strategist at Interactive Brokers, who has had one since he started his career at Salomon Brothers in the late 1980s. ”

            One more:
            The company’s ability to charge for the privilege of renting a terminal is the envy of the data industry. Last year, Bloomberg raised the price for just one of its terminals by about 9 per cent to $30,000 ($2,500 a month) and the cost of multiple ones to $26,580 per unit, as reported by the FT. Because the company refuses to cut deals, even for its biggest clients, and because of how rare it is to get rid of one once they’re installed, that means the annual revenues thrown off by the terminals over the next two years are easy to calculate: at least $9.7bn. 

            Free link for FT subscribers: https://on.ft.com/3ojbQdm
            Free gift link for non-FT types: https://on.ft.com/3Lxf7PH (“This link can be opened up to 3 times and is valid for 90 days.”)


            1. Es, The companies know or have access to the info. Did you see this from an earlier post?…This is from TFIN from their annual shareholder meeting that was SEC filed a few weeks ago…Notice they put the shareholder count in it….
              Stockholders Entitled to Notice and to Vote; Quorum
              Only holders of record of our Common Stock at the close of business on February 27, 2023, which the Board of Directors has set as the record date, are entitled to notice of, and to vote at, the Annual Meeting. As of February 27, 2023 we had 23,318,730 shares of Common Stock outstanding and entitled to vote at the Annual Meeting, and our shares of Common Stock were held by approximately 269 stockholders of record. Each stockholder of record of Common Stock on the record date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting. There are no cumulative voting rights in the election of directors.

                1. ES, you got a hard road to toe. Up into the 1990s many annual filings listed the amount of shareholders of record in the commons and the preferreds. But largely certificate issued securities are now long gone and most are in street name. So if 1000 street named shareholders owned through Schwab it would show as 1 shareholder. This is a method companies could use to go dark easier.

                  1. Grid, gentle correction: “row to hoe”, not “road to toe”. Can’t say as I’ve ever had to hoe a row of anything, but when the sun is hot and the field is wide, I expect it’s not easy…

                    1. Yes, guess your right, Bur. But I just got back from a hard 75 min walk up and down some hilly roads. And it was definitely a hard road on my toes!

  2. How many “expert market” AKA EM issues are there? Yesterday I posted about Dayton and Michigan Railroad, DMRRP, but as FC pointed out, I failed to mention that is was an EM issue. I should have pointed that out in the original post and in the future will either explicitly state that an issue is EM or I will NOT post about it. I think there are a number of III’ers that are able to trade in EM issues. I thought I should have the community double check my list of EM issues. Here are the 25 EM issues that I show are currently paying dividends or interest:

    AATRL, Baby, Paying
    AFFS, Baby, Paying
    AFFT, Baby, Paying
    AFSIA, Pref, Paying
    AFSIB, Pref, Paying
    AFSIC, Pref, Paying
    AFSIM, Pref, Paying
    AFSIN, Pref, Paying
    AFSIP, Pref, Paying
    AMBKP, Baby, Paying
    AWRY, Pref, Paying
    BANGN, Pref, Paying
    CTGSP, Pref, Paying
    DMRRP, Pref, Paying
    GMLPF, Pref, Paying
    KTBA, Baby, Paying
    LTSA, Pref, Paying
    LTSF, Baby, Paying
    LTSH, Baby, Paying
    LTSK, Baby, Paying
    LTSL, Baby, Paying
    MSSEL, Pref, Paying
    OCESP, Pref, Paying
    SLMNP, Pref, Paying
    YGYIP, Pref, Paying

    I doubt that many III’ers trade EM issues that are NOT paying out, but just in case, here are the 15 that I show.

    AMTPQ, Pref, Deferred
    ATPGQ, Pref, Suspend
    CBJCL, Pref, Suspend
    CBTRP, Baby, Suspend
    COTRP, Baby, Suspend
    EHPTP, Pref, Deferred
    LEHKQ, Baby, Suspend
    LEHLQ, Baby, Suspend
    LEHNQ, Baby, Suspend
    LHHMQ, Baby, Suspend
    NUSPQ, Pref, Suspend
    PARDP, Pref, Deferred
    SKRUF, Pref, Suspend
    SMANP, Pref, Deferred
    TEUCF, Pref, Deferred

    Please speak up if I have either left an issue out and/or have it incorrectly listed. I have NOT attempted to place orders for all of these using a regular account, my data came via other methods.

  3. A Miracle, verbatim from FT

    SEC delays enforcing disclosure rule on bond markets until 2025
    Financial Times

    The US securities regulator on Wednesday said it would delay implementing a rule meant to bring transparency to corporate bond markets, bowing to fierce industry lobbying as banks and trading houses warned that enforcing the 51-year-old rule on fixed income could cause “significant, deleterious effect” on the market.

    The Securities and Exchange Commission has postponed an amendment to ‘rule 15c2-11’ until January 4, 2025, giving broker dealers in the bond market two more years to prepare themselves.

    The statute, first implemented in 1971, requires dealers to check that a wide range of financial information is up to date on each company for which they quote prices. In 2020, the SEC amended the rule, requiring dealers to ensure the details they were checking were publicly available to investors.

    Many market participants had assumed that the rule and its amendment related only to equity trading. But they had never explicitly excluded bonds — and last year the SEC decided that the rule would apply additionally to fixed income, setting off a rush among bankers and trading platforms to get ready for a dramatic shift in required disclosures.

    The Securities Industry and Financial Markets Association said on Wednesday it was “pleased the SEC has recognized the potential harm” that US companies and investors would have endured from the application of the public disclosure requirements of Rule 15c2-11 to the 144A market. The 144A market allows issuers to raise capital from qualified institutional investors, such as pension funds, without having to register their securities publicly with the SEC. It has grown rapidly in size in recent years.

    Still, “we note that the relief is not permanent,” said Kenneth E. Bentsen, Jr, president and chief executive of Sifma.

  4. The January 4, 2023 deadline for 15c2-11’s application to fixed income is fast approaching. There have been numerous recent law firm PRs advising corporate clients to be aware – here’s the latest, with the Federal Regulation of Securities Committee of the Business Law Section of the American Bar Association weighing in:
    ABA Committee Submits Letter to SEC Requesting 15c2-11 Relief for Fixed Income Securities

    Bass Berry & Sims PLC

    November 29 2022
    Rule 15c2-11 under the Securities Exchange Act of 1934 (Exchange Act) governs when dealers can publish quotations for securities. In September 2020, the U.S. Securities and Exchange Commission (SEC) amended the rule prohibiting them from publishing quotes when current information about the issuer isn’t publicly available. In 2021, the Staff in the Division of Trading and Markets issued a no-action letter (the No-Action Letter) that clarified its position that Rule 15c2-11 applies to all securities, including fixed-income securities as well as equity securities, but provided limited-time relief for fixed income securities that were offered under Rule 144A. This limited relief will expire on January 3, 2023, which means market practice for private Rule 144A issuers will be significantly impacted.

    Absent some action being taken by the SEC, the public disclosure requirement for fixed income securities will come into effect on January 4, 2023. We are hopeful the SEC takes action in December to avoid the potential negative consequences as outlined in the Committee’s letter.


    Link to ABA letter:


  5. This is not a purchase for everyone but SJIJ is once again buyable with an 8 percent plus yield. Yes.. it will probably go “dark” but one can purchase a tiny bit and be more prepared for that final dump down the road. I bought a whopping whole 10 shares @17.38 to track it more closely and I am trying to figure out what lowly bid I would like to place to gobble up more to hold “forever”. 9.5% yield perhaps? Any thoughts here where someone here might place a possible bid to catch the “big dump”? I am thinking 15 a share which would yield 9.4%.

    If it never works out I just dump the 10 shares with a sale on the expert or eyeball it in the account for many many years to come.

    1. FC- Using KTBA as an example, “A” rated and currently trading at a 10.4% Divy, I would suggest that SJIJ (rated BB+) would trade around $13.00 on Expert market. I now regret thinking KTBA was buyable at $27-28. Wish I knew then what I know now about the expert market. I will think long and hard before dipping into that mess again!!

      1. Is this a good time to quote Bob Seger? “Wish I didn’t know now what I didn’t know then.”

        1. So 2WR on the LTS BB’s it was showing today of bids in the 13.00 range. It was also saying on TDA for dividend payments none recorded. I find that hard to believe.
          Was it Bur Davis asking about Ocean Spray when it would pay its dividends over on the illiquids page?
          That is only problem I see with these expert market stocks, no record of if the dividends will be or are paid.

          1. Yep that was me. First asking what the liquidation preference is ($25), then being confused about dividend payment dates (semi-annual not quarterly). Thanks again to micahc and grid for answers.

      2. Yes, I agree based on what has changed and future unknowables SJIJ has no allure for me. If one is hell bent on owning debt from SJI, the uncallable 5.02% 2031 note on the bond market is presently trading 78.68 for a 8.62% YTM on TD. At least there is a defined exit point one may still live to see.

        1. I think Bur & Grid this what defines the youthful investor who is willing to take risks and the more conservative investor who is looking for income and protection from capitol loss.
          I have a risk streak in me that I am trying to rein in. Authors and readers over on SA constantly talk about when is the bottom going to be in so they can jump back in.
          I feel like I am on a road trip with a bunch of kids asking, “are we there yet?”

    2. So it looks like PFF holds 634,662 shares of SJIJ as of yesterday. That is not a lot for them but it seems like a lot for the market to absorb unless they do a private placement. On 2/8/2022 they held 671,373 shares so the amount has changed downwards a tad bit. Who knows what other ETFs hold it that would have to unload if it goes to the expert market. This is a preferred where 50,000 shares traded in one day is pretty large.

      A bid of 15 almost seems guaranteed to get filled if they try to sell the shares in a few day period. Sounds like the above advice of less then 15 is becoming more solid.

      1. I said preferred above. I meant baby bond. I wonder if it is even worth posting to correct these typos when most knew what I meant.

  6. Happy Birthday to SEC Rule 15c2-11! The rule became effective a year ago today.

    How has the rule affected the III investment community? I’d be interested in surveying the crowd and hearing your thoughts with the benefit of one year’s hindsight. From my own perspective, I’ve seen a number of issues “go dark” (trade on the expert market) as expected, with the brokers providing adequate notice of same. The Ladenburg preferred and baby bond issues are my biggest (intentional) exposure there. They pay like clockwork, and I’ve recently started “dripping” LTSA dividends at TDA. So far, so good.

    However, I didn’t expect to get “GMLPF’d”. That one wasn’t broadcast by brokers or by OTC Markets prior to the September 30, 2021 effective date. C’est la vie, I guess.

    We have an increased awareness of the possibility of delisting and shares going to the expert market, which is a good thing. The South Jersey 5.625% preferred share issue SJIJ is a good example of that. Better to know ahead of time, yes?

    I’ve also seen an increased fear in the last year of preferred shares getting “orphaned” by take-private initiatives. The latest sagas include the Hoegh HMLP-A preferred shares and the three ATCO / Seaspan preferred shares and one senior note ATCOL. Is this fear rational? Hard to say, but I think the fear has been a little bit overblown, and has created opportunities when the fear kicks in and people sell based on that fear.

    And there has been a darkly humorous aspect of this ham-handed effort by the SEC to protect small investors. I got a big laugh out of Maverick61’s comment a couple of days ago, where he wrote about PSB preferred shares: “… the likelihood of them going to the expert market anytime soon is slim to none, and slim left the building.”

    So – Happy 1st birthday, 15c2-11!

    1. The thing that has infuriated me from the outset is the lack of transparency for the retail investor. Who exactly qualifies as an ‘expert’ seems to be some sort of “if you have to ask, you ain’t”.

  7. Does anyone know of a market maker that will accept non-solicited trades in the “Expert Market” from investors in an operating OTC Market company, delinquent but actievely filing past due reports in an orderly fashion?

  8. Here’s a tender offer for up to $50M of $LTSL from an outside investment firm. Offering $15 on a $25 baby bond; it will be interesting to see how much interest there is in the offering.


    Offering documents:


    (Tim, I stuck this in the 15c2-11 chain since there have been quite a few comments here on the Ladenburg baby bonds and preferred shares. Feel free to move it.)

  9. Anyone interested in GMLPF, I got sub-$21 fills yesterday with Fido. None of my other brokers (TDA, IB, Vanguard, GS) allow buys. I believe NFE will call this one or buy in the open market.

  10. No collusion at all. This issue had a NYSE ticker, and it got delisted in 2007 when Bell South was finished being taken over by ATT (or Southwestern Bell which renamed itself ATT, I forget when that happened). So brokerage was free to delist after that happened evidently. Brokerage had useless filings anyways. They just always stated to see companies filings for financials. There really wasnt much to the filings if memory serves me.

    1. on an unrelated note, Grid, did you get your copy of the financials for Somers Group Holdings, Ltd today? [aka WTREP] . I received them via TDA with some dire “private and confidential” warning but I assume everyone who owns WTREP got them as well.. A quick glance seemed to look like they’re doing fine (loved their combined ratios), but no mention of any pending actions on WTREP…. So I guess we’re just going to have to grin and bear it receiving these healthy dividends from a security worth zippo……..

      1. Yes, I actually got it twice from 2 different brokerage accounts. And yes when I saw the headline note of email before I opened it up, I thought it may be a call. BTW, the “certificate of designation” (equivalent to a prospectus since it was private issued) has no “Libor back up” info.
        Since it was delisted last July, they have had plenty of time to arrange financing of however they wanted to redeem. The issue just round tripped and returned to its egg. It started as a private equity preferred and returned back to that status. We are just used to seeing a value and tradeability. The vast amount of preferreds dollar wise are private issuances. It just isnt normal for us. But its getting more normal each day like it or not, ha.

          1. But first Mr. C, before the money comes you have to survive all the “Why haven’t I got my WTREP dividend yet” posts. 😂

            1. Good one Grid. By the way, I looked at that report, what I got paid, # of shares I owned, and compared that against last quarter’s #s. It doesnt look like a whole lot of investors redeemed and converted their shares way back when. .4838/share paid out, and they paid out 1,039,000 in dividends. That should be around 2,147,581 shares, and worth about $53,689,541 in value. The have a line item that says its worth 53,630,000 so I am off a bit on my math. I valued them at $25/share, so maybe something there.

              If you look at the original issue of about 53.8 million… Looks like hardly anyone took them up on their offer and converted since this was last quarters numbers and the right to convert them. Regardless, I’m still happy collecting about 7.7% on a non volatile stock with 6,143 shares. Gotta love the 1% min floor on the floating rate 🙂

              1. Mr. C, About $200 million were issued privately in 2014. A little over 76% were redeemed right after first call date window opened up and newly formed merger created a publicly traded company.
                The 53 million wasnt the original issuance. It was what was left after the majority were redeemed in 2019. It was issued in 2014. I suspect the ones redeemed were by the insiders who wanted them redeemed. The rest stayed outstanding a ticker was created for it.

                1. Not sure I understand this. May this be a fly in ointment that slows the redemption of this ??

                  . —–Because the redemption features are not solely within the control of the
                  Company, the preference shares have been recorded as mezzanine equity on the Company’s consolidated
                  balance sheets……—-

                  1. No this is just slotted accounting. Preferreds where redemptions are not totally controlled by company is treated as mezzanine equity. Just like term dated preferreds (where company is forced to redeem at a specific point in time) is actually treated as a liability, and not equity at all.

  11. This is certainly an interesting approach to circumventing the strictures of 15c2-11:
    Biloxi Marsh Lands Corporation Announces Creation of Electronic Bulletin Board for Trading of its Shares

    January 28, 2022 02:05 PM Eastern Standard Time

    METAIRIE, La.–(BUSINESS WIRE)–To give its shareholders more liquidity, Biloxi Marsh Lands Corporation today announced that it is creating a passive electronic stock-trading bulletin board. Using the bulletin board, shareholders and investors will be able to post notices of intent to buy or sell the Company’s common stock and to browse those posts for possible purchases or sales. Shareholders and investors can then directly communicate with each other to arrange the purchase or sale of the shares. Biloxi Marsh Lands Corporation will not act as a broker and participants will have to arrange for the delivery of payment and of shares themselves. The Company’s goal is to set up a 24/7 internet platform that will give our shareholders a forum to buy and sell the Company’s shares of common stock.

    Previously, shares of Biloxi Marsh Lands Corporation had traded on the over-the-counter market under the symbol, “BLMC” and the shares were quoted on the Pink Sheets©. After September 28, 2021 and the implementation of amended Rule 15c2-11, the SEC prohibited broker-dealers from quoting companies like Biloxi Marsh Lands Corporation, who do not provide financial statements that are prepared according to Generally Accepted Accounting Principles (“GAAP”).

    Meeting the requirements of the amended SEC rule, which includes the conversion and maintenance of GAAP financial statements, will significantly increase costs to the Company, both in financial consideration paid to third parties and increased internal administrative expenses. The Company will continue its long-time practice of issuing current annual audited financial statements on the income tax basis of reporting and annual President’s Letter along with quarterly and special press releases. All this information has been and will be available on the Company’s website: http://www.biloximarshlandscorp.com.

    Biloxi Marsh Lands Corporation hopes to have its electronic bulletin board up and running by the end of the first quarter of this year. Biloxi Marsh Lands Corporation is not a registered national securities exchange, information processor, broker, dealer, or investment adviser.

    1. Interesting, but when Mr X wants to sell 100 shares to Mr. Y, what does he do to complete the transaction? Is the company going to revert to issuing paper shares and Mr X. mail his 100 shares to Mr. Y (don’t mean to be sexist, sorry ’bout that) or how will a transfer be handled? And for that matter, if Mr X has been holding his shares at a broker’s ever since it was BLMC, how’s he going to get them out and what is it he will receive from them??? I’m not being critical, I just wonder how it’s going to work..

      And on a semi-related point, I keep wondering why a huge company like LYB wouldn’t be willing to absorb the reporting costs to overcome 15c-2-11 restraints on SLMNP for shareholders…… I’m sure there must be a whole lot more to it than I can even imagine.

      1. 2WR, Basically you have to remember they delisted them when A Schulman was acquired. That technically means “I dont give a s**t about the stock”. They already washed their hands from it at that point, other than the obligation of prospectus. So now why would they go to any effort now? Plus they have to extract the specific financials of that sub. and they havent been doing that.
        Plus in their minds at acquisition shareholders had a chance to tender them with a slight bonus to par at that point and avoid any delisting. The fact they popped up on OTC and traded had nothing to do with them. Plus as told by their IR management, LYB is not obligator of payment. They just own the company’s shares.
        My bet is LYB will do this as soon as CSX does it for DMRRP and AWRY. 🙂

        1. I feel the LYB IR simply gave the most depressing and misleading answer possible without breaking any laws/lie/inaccuracy to deter possible buyers of the preferred. This way they would possibly get ?tendered? to them over time and cause the price to slowly sink to that level. LYB bought SHLM. They own SHLM lock stock and barrel including obligations to pay the dividends on the preferred. That answer sounds like a lawyer was asked how to phrase it to discourage people since they created some technical mumbo jumbo barrier between divisions/reporting segment. To stop paying it would be tantamount for LYB to say one of their “segments” is basically on hard times and cannot pay their “obligations”. I have a feeling a court would not look fondly on such a shenanigan if push came to shove for a large holder to sue one day to get paid cumulative dividends they are owed especially when parts of LYB were surely integrated into parts of SHLM. Synergies and savings in other words.

          1. I doubt there is any concern of payment, and I didnt mean to project that. My point was directed to minimizing 2WR’s hope for LYB to do anything that would cause SLMNP to be a tradeable ticker. I just view it unlikely because there was a chance to redeem it over par at acquisition and when they delisted they washed their hands of it being an exchange traded issue. So why would they go to the effort of making it tradeable on OTC as they had no doing in it trading on OTC to begin with?
            I dont think that makes it dividend payment any less secure though. WTREP is one of my biggest issues and its delisted and isnt even tradeable (and that ticker doesnt exist, I just use it for reference). I lose no sleep over it, but again, I have no urge or need to sell it. Prospectus obligations are unrelated to the trading mechanism of the issue. As we frequently see, exchange listed securities do suspend their preferred dividends.
            To me, the easiest path for it to trade again, is either the brokerages amending their procedures or the SEC giving cover to allow it by modifying their one size fits all poorly thought out and implemented regs.

            1. I certainly don’t disagree with your statement “the easiest path for it to trade again, is either the brokerages amending their procedures or the SEC giving cover to allow it by modifying their one size fits all poorly thought out and implemented regs.” I guess I was just dreaming outloud at how theoretically easy it might be for some of the larger companies that have seen some of their shareholders negatively impacted by 15c-2-11 by situations similar to the LYB/Schulman situation to make a statement thru an easy fix who’s economic cost could easily be relatively immaterial to them. I know Schulman has been absorbed into their polymers division so maybe it isn’t even really that easy for them specifically offer up compliance anyway. It just seems to me that what is needed to get the SEC to modify their one size fits all, poorly thought out and implemented reg is for shareholders impacted so negatively by this travesty of a rule to uncover big allies from currently unexpected sources and maybe action by companies like LYB could be one of sources… Then again, from LYB’s point of view, this idea would not be a way to make a statement against 15c-2-11 – it’d actually be more of a cave-in to its effects and only reinforce the SEC’s thinking of what a wonderful thing they have done. So I’m giving my original dreaming outloud idea a big Roseanne Rosannadanna “nevermind.”

              1. I personally have a preferred with more of a claim to getting off the experts list than SLMNP. BANGN….Its Maines second largest public utility and their complete financials are of public record and are issued to Maines public regulatory agency annually meeting SEC guidelines. But that isnt good enough for the idiots at SEC or OTC. I dont see the city of Calgary making any effort to pay OTC the extortion fee and mailing them the financials when they are right there in front of God and man to begin with.

    1. I don’t think there could be a more blatant example of how this rule has benefited them. Disgusting. This should be investigated by the SEC.

      1. I suspect the intent of the card is to advertise that they offer services for dealing with the new rule…see the words on the hood of the car?

        But anyway, go right ahead and ask the SEC to investigate OTC Markets when the SEC is the one that created the rule knowing it would benefit OTC Markets.

    2. There is a flaw in their card … they omitted the retail investor that is under and being run over by the car. Too bad I’m not better at Photoshop …

  12. Perhaps a glimmer of hope for shareholders who own securities affected by the misbegotten 15c2-11?

    Bloomberg Launches Fixed Income Quotation Transparency Product Related to SEC Rule 15c2-11

    New Bloomberg Data License product to help market participants navigate the application of SEC Rule 15c2-11 to fixed income securities

    NEW YORK, Dec. 17, 2021 /PRNewswire/ — Bloomberg today announced the launch of its Fixed Income Quotation Transparency product to provide broker-dealers with information that can be integrated into their compliance program to help identify fixed income securities that may be impacted by SEC Rule 15c2-11.

    The October 2020 amendments to SEC Rule 15c2-11 requires broker-dealers to review certain current and publicly available information about an issuer of a security not listed on a U.S. exchange prior to initiating or resuming quotations for the security on a quotation medium.

    Bloomberg’s Quotation Transparency product provides broker-dealers with attributes that may be relevant to a broker-dealer’s determination of whether a security may still be quoted on an OTC quotation medium under SEC Rule 15c2-11. The attributes are easily integrated into a broker-dealer’s legal and compliance team’s own policies and procedures to help with the determination of whether a quotation may be provided. Additionally, the date of the last audited financials of the issuer is provided as a potential indication of whether any publicly available issuer information exists to source the required data fields for a broker-dealer to determine whether a security is eligible to be quoted on an OTC market quotation medium.

    “Given the need to review information on a security not listed on a U.S. exchange prior to initiating or resuming quotations, our clients approached us looking for a solution to this compliance challenge,” said Brad Foster, Global Head of Enterprise Data Content at Bloomberg. “Our breadth of data and detailed rule engines enabled us to deliver a solution, which assists client’s compliance and legal teams in determining which fixed income securities can or cannot be quoted. The architecture of this solution is highly flexible so that it can rapidly implement changes stemming from any future SEC guidance.”


    1. Nope, this is for fixed income, not equities. And it is a compliance tool for professionals; doesn’t mean that you can trade them any differently.

    2. First Bloomberg, now ICE – is it too much to hope that some entrepreneurial soul will eventually rid us of the 15c2-11 scourge for equity-based preferred shares and baby bonds?
      ICE Announces Launch of Its Fixed Income Quotation Transparency Service
      ICE solution can help customers meet requirements under recent SEC Rule 15c2-11 amendments

      January 04, 2022 08:30 AM Eastern Standard Time
      ATLANTA & NEW YORK–(BUSINESS WIRE)–Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced the launch of its leading-edge service that is designed to enable broker-dealers to meet the new requirements resulting from recent amendments to SEC Rule 15c2-11. The ICE solution helps broker-dealers obtain and review issuer information about fixed income securities before publishing or submitting a quotation in a quotation medium in accordance with the newly-updated rule and conditional relief provided in the SEC Staff’s December 16 No-Action Letter.


  13. SEC Commissioner Hester Peirce on Twitter a few minutes ago, regarding the upcoming SEC public meeting:

    “The latest regulatory agenda shows that the SEC will be busy in the upcoming months, but it won’t be working on the right things…”


    Excerpt from statement of Commissioners Peirce and Elad L. Roisman:

    “The Agenda abandons two important endeavors crucial to maintaining fair, orderly, and efficient markets, which had been in progress during the prior administration.

    The first is the proposed exemption from Exchange Act Rule 15c2-11 for certain publications of broker-dealer quotations on an expert market.[5] The Commission recently amended Rule 15c2-11 to enhance the requirements a broker-dealer must satisfy before it initiates or resumes the quotation of a security in the over-the-counter (“OTC”) market.[6] While we supported the important investor protections these changes brought, we also cautioned—as did many commenters—that the amendments could have unintended adverse consequences for certain investors of companies that choose not to make disclosures.[7] A key reason we supported these rules was the Commission’s explicit willingness to use exemptive relief for an expert market to ensure that investors in these companies would still be able to sell their shares. We are disappointed that the agency is no longer considering this exemption,[8] despite the overwhelming support of commenters and the adverse consequences investors now are experiencing.[9] Nor does the Agenda include plans to prevent Rule 15c2-11 from being misapplied to fixed-income securities. A rulemaking tailored to fixed income securities would make a lot more sense than trying to shoehorn these securities into a rule designed for equity securities.”

    (Statement continues …)

    So at least two SEC commissioners appear to realize what a hash of things 15c2-11 has made; pity they apparently can’t do anything about it.

  14. Jus’ Wonderin’ – I wonder when underwriters will begin to write covenants into prospectuses protecting investors against any corporate actions that might make the issue subject to this foolhardy Rule 15c2-11? I know I’d like to see that in any new issue prospectus..

    Hope all III’ers had a Happy Thanksgiving

  15. Schwab increasing prices for OTC and CanadianOver-The-Counter trade pricing will change on December 6, 2021

    You are receiving this communication because you traded one or more Over-The-Counter (OTC) securities within the last 180 days.

    Please be advised that OTC trade pricing changes are taking effect soon. We are making this change due the complexity of trading these securities and to better match broader market pricing.

    This change will only impact U.S. OTC securities. You will continue to pay $0 for online commissions for U.S. exchange-listed equity securities*.
    What this means for your account(s).

    Online commissions for U.S. OTC securities, including unlisted American Depository Receipts (ADRs), and Canadian securities will increase to $6.95 per trade. The new rate will be applied to trades executed starting on December 6, 2021.

    Online trading commissions for OTC securities will be as follows:

    Non-National Market System (NMS) Securities Previous Rate New Rate Effective 12/6/2021
    U.S. Over-The-Counter (OTC) Securities, including unlisted American Depository Receipts (ADRs) $0 $6.95
    Canadian Stock Transactions $0 $6.95

  16. Coming hard on the heels of new Rule 15c2-11, the SEC is today (November 18, 2021) proposing to modify how short sales are reported. Perhaps one or more members of the III community has strong feelings on this topic, and will comment?
    SEC Proposes Rule to Provide Transparency in the Securities Lending Market

    Press release:

    Fact sheet:

    Full text of rule and commentary (108 pages):
    (Tim, if there’s a better place to “park” this proposed SEC rule, let me know where and I’ll repost it.)

    1. E3W#–this is as good of a place as any. I quite deleted old commenting so it will remain here for years.

    2. Proposed Amendments to SEC Rule 10c-1 – Securities Traders Ass’n. Explainer

      “On November 18th the SEC published and requested comment on proposed Rule 10c-1 (Rule) which would for the first time require all lenders of securities to provide data and material negotiated terms of securities lending transactions for public dissemination. The proposed new reporting and disclosure requirements are extensive and will likely represent significant operational and compliance challenges for a broad range of market participants.

      To help raise awareness and educate the broader industry on this significant development, STA is pleased to provide a recorded Open Call featuring legal experts Larry Bergmann, J.D. and Matt Comstock, J.D. of Murphy & McGonigle.”


      Murphy & McGonigle Summary:



      “The rule would cover all securities, i.e., debt and equity; …”

      1. There has been some horrible abuses in the municipal fixed income market that has led to some pretty hefty fines. (and rightly so)
        Market participants have been selling municipal bonds to their customers without actually buying it, and creating a loan position that lasts for months or even over a year in some cases. From a tax perspective, this is really bad because for tax-exempt bonds, the interest is no longer tax-exempt on the borrow, (of course which was never communicated to the tax system to switch it from tax-exempt interest to taxable interest)

        the new rule will likely make these borrow positions public.

  17. Did preferred IPOs always start on the grey market in the past and I just never noticed because I was always able to buy them? Is there a reason they do not start on the pink with current info?

    These new rules have almost completely broken my abilities to buy half of the new IPOs before they hit a major exchange resulting in I having to pay more. Wouldn’t it be in the best interest of the OTC to get these on the pink so more people can trade on their network? If you read over the OTC’s recent earning’s call transcript I came away with the impression they enjoyed these new rules. Oh yes it created a lot of work but it made their moat wider, helped bring in new income, and they seem very happy and content with the outcome. We are not their customers it appears. The “experts” are and the new SEC rules catered to them perfectly.

    1. fc – Don’t you realize you can’t compete with the newly created “experts?” You’re too stupid and should be thankful you’re being protected from your own stupidity…….ha

      1. MCG – it’s more than paperwork. OPPBV is trading at Schwab and Fidelity. My broker TDA will not trade it until it goes off Grey Market. The Trade Resolution dept. says it’s a business decision. I said that decision will probably lose them customers including me. I told them that I don’t need a NANNY broker.

        1. No, it actually is paperwork. We aren’t discussing nuances of individual brokers but why OTC issues get listed as Grey vs Pink-Current on the first day of trading.

    2. Like many others, this new rule (intrusion) has cost me money, not made me more safe. How does a person get the “expert” rating? Is there any hope for a more-or-less average Joe to get that expert qualification?

      1. Dave, We cannot get it. You essentially have to pay more money to get the services of a full service brokerage account I suppose. I am just guessing here but it is the folks who want to take a cut of all your money each year and charge you for a specific trade. It is the same people who would determine if you are an accredited investor as well. None of that is free or easy to attain. In the end we pay. I reckon the costs to do it will offset any possible gains when it comes to the grey/expert markets unless you are buying 25K shares of a new IPO preferred to save 10 cents a share on a frequent basis or some type of volume.

  18. The “experts” strike again.

    AATRL had not traded since 11/4 at 59.50. A few small trades early afternoon today around 60. Then 10,000 at 60.02 at 3:02 and 40,000+ at 60.83 at 3:38. Last trade 104 shares at 51.50 at 3:55.

    So who’s right here? The experts who bought 50,000 shares at 60+, or the expert who bought 104 shares at 51.50? Meanwhile, being a mark to market type, based on the closing price, I’m down $8 per share on my AATRL today.

  19. Perhaps of interest to readers here – the transcript of yesterday’s OTC Markets Group Q3 2021 earnings call. The line about “crawling over glass” for investors to trade in the expert market caught my eye:

    “Now, it shifted in areas. We still have work to do. The expert market is too clamped down. Every brokerage industry, successful brokerage firms have a good conversation between compliance, the commercial interests, and primarily their customers is — on right now, the customers have to crawl over glass to get to the expert market. And so the pendulum probably needs to swing to a bit more thoughtful area.

    But our overall places, we think the establishment of a baseline for companies to have a public quote, in line with the SEC’s goal that a company makes a baseline of current information available, and it’s not a huge, heavy baseline. I mean, it’s not audited financials on the ongoing basis. To enter the market, you would need audited financials, but for ongoing, it’s U.S. GAAP. And you do need — companies need some basic financial skills to prepare those statements.”


  20. If anyone cares to know I can buy BHFPV on ally.com but I cannot buy EFSSV. I was on the phone with ally today and they said that “they do not have a market for it” which might make sense in some odd way or maybe not. I am not an expert.

    Both are pink with info at this time. So being able to purchase one versus the other is very confusing but things seem to be improving slowly.

  21. Oh… maybe not so much different! Think we are both stuck with these for a long time and it may be my heirs who have to deal with it! As I said though as long as they pay it is not so bad. Hard to replace the income these produce.

    1. DJ, If things go bad they will sink in a money pit together. I bought right before it went expert market, so it was with full intention of buying and holding until 2029 so I cant say I got screwed by SEC ruling here. The debt has to be paid unlike a preferred so if there were shenanigans its harder to do with the bond. I bought a crap delisted baby bond 4 or so years ago, and will keep it to 2032 maturity. So I will just let them both play out.

      1. OK…. Sounds Like I get to go first in the water! You get to stand on my shoulders until it gets really bad! I I bought LTSA in early 2013 at just over $22. Even with the drop to just under $14 I have only lost about half of the dividends it has earned, so I am still in the black pretty good. Hate losing my hard earned capital though, so I hope this eventually has a good ending for both of us. Long as they send the dividend check promptly!

  22. It’s been quit recently on GMLPF and LTSA, both of which I hold. Right now it appears I am stuck with these two unless I want to take a big loss on LTSA and a small loss on GMLPF, assuming I can even sell them. It is not the end of the world to be stuck with them as long as they continue to pay on time as they have. Not a lot of places to get 8.75% and 8% respectively. New Fortress Energy and Advisors Group also appear to be financially stable and not going away. Anybody care to hazard a guess what the future holds for these two?

    1. The revision of the Outlook to Stable from Negative reflects the stabilization of operating environment for Advisor Group businesses, strong execution against planned cost synergies in the Ladenburg Thalmann acquisition, improving scale and organic expansion, which, over time, should help reduce cash flow leverage and improve interest coverage.

      So its currently fine for a levered entity and sad sack CCC rating. The public traded equal standing Advisor Group bond last traded at an 11% premium. Selling now is about 50% pricing discount to an equivalent bond. The experts love these buys. Its 2029 or bust for me.

      1. Thanks for your thoughts about Advisors Group, but I am curious about the 2029 date. Thought LTSA had no maturity and can be called anytime after 5/24/18. Re-read the prospectus and the supplementary one and can’t find a reference to 2029. What happens other than I am pushing 80 by then !?!?

        1. DJ, oops, my bad, you are in the preferred. I am in LTSH and was brain locked on that I guess, which is a bond and a 2029 maturity. Yes, your situation is different. I wouldnt know how to evaluate that issue since its a perpetual preferred.

    1. Sometimes Schwab will allow a buy. What has worked for me at times is to place only day orders and walk the price up. Seems Schwab does not like GTC orders. In other words, try buying at say 28…if order is “outed”, try 28.5 and so on until you either reach a fill or a price you are unwilling to pay.

      1. RB
        I tried to buy KTBA a couple of times this morning at Schwab for 28.00 and 28.50 and the orders kept getting cancelled in 5 minutes so I gave up. After reading your note above I just went in at 28.85 and got 100 filled twice in a row. It seems (I assume) if you hit an open sell order it will go through, but they will not keep an order open. Whatever, a great buy with the divi coming up.!! Thanks!

    2. I haven’t been able to with Vanguard or Etrade, but I see that some here were able to purchase earlier in October with other brokers.

      1. I hate this rule. Now I can no longer buy KTBA on Merrill. I bought some there earlier this week.

          1. Glad I sold out of KTBA at 31+ right when this expert crap started.
            Anyone who wants to sell going forward is at the mercy of the “experts”

            I don’t like that uncertainty

            1. Mav – Don’t you realize the “experts” are there to protect and that they only have your interests in mind to prevent you from going wrong??? They offer nothing but fair prices based on market competition. and by doing that they help protect you from profits to be had by doing your own flawed due diligence…. Thank you SEC

              1. Ha – you are so right 2WR

                The experts have all of our best interests at heart. How did we ever manage without them and the SEC’s wisdom

        1. the underlying bond for KTBA is 079867AP2, and it is trading at 150 or so, or a yield of right around 4.5, or to convert it to KTBA, it is 1500/40 or $37.50
          so KTBA is trading at a huge discount to the underlying bond, which would trade at 114 if it was trading in line with KTBA at 28.50.
          I guess you can’t turn in the KTBA and get the underlying bonds and profit from the arbitrage.

          1. ATT has tendered for the bond in December of many years past. I sold my bonds at 141 I think on a tender. ATT could always tender for KTBA.

            1. Mcg – do you know if TDA has decided not to trade any OTC? I can’t get a straight answer out of them. Their parent company Schwab seems to allow trading in these securities while TDA doesn’t. Thanks for replies everyone.

            2. I believe if memory serves, there were no call warrants issued with this back in the day. I think its just stranded and of course per terms of the prospectus.

              1. There are call warrants, but they are with Citigroup (“warrantholders” in the prospectus), as a company they created issued this thing and only they can buy the securities, turn in the warrants/certificates and receive the underlying bonds and get the arbitrage for themselves.

                1. That is standard with trust debt issuances that the brokerage holds them. But only if that was declared in prospectus. I have tried reading this one several times and have never found that disclosure which I have found easily in other ones like this (or were before being redeemed long ago).
                  So unless I missed it (which is possible as there are a lot of words to read, ha) this one does not have call waarants that brokerage controls. There are several like this…KTH for example has no call warrants.

                  1. I had to read it a few times to figure it out, because some of the language appears contradictory, and the way I figured that it was citigroup was literally googling the address listed.

                    1. Smith Barney issued it and Citi swallowed up the brokerage years later. But that only determined who issued it and really is irrelevant if there are no call warrants. I still never saw a mention of call warrants exercisable to force a redemption. Did you locate that somewhere I missed?

                    2. https://www.sec.gov/Archives/edgar/data/894356/000093041304001097/0000930413-04-001097.txt

                      this part.
                      Affiliate Exchange Right

                      Any affiliate of the Depositor, but not the Depositor itself, will have
                      the right, subject to the limitations contained in the Trust Agreement, on any date to tender to the Trustee Certificates of a specified principal amount together with Call Warrants relating to an equal principal amount of Underlying Debentures, and to receive in exchange Underlying Debentures in an equal principal amount.

                      This is the paragraph from the beginning of page S-4 that indicates the warrants are separate from the certificates.


                      On the Closing Date, the Trust also will issue Call
                      Warrants, which represent the right of a holder of the Call
                      Warrants to purchase the Underlying Debentures from the
                      Trust on certain dates as described in this Prospectus
                      Supplement. The Call Warrants are not being offered hereby.
                      this later filing gives a better description:

                      The Trust will issue [three] classes of securities, one of which is the Certificates offered pursuant to this Prospectus Supplement and related prospectus. [The two other classes of securities are the I/O Certificates and the Call Warrants which are sold separately in private transactions as further described herein.] [The Certificates and [the I/O Certificates] are collectively the “[Name of Certificates].”]

                      [On the closing date, the Call Warrants will be held by Citigroup Global Markets Limited, an affiliate of the Company. The Call Warrants may be sold or transferred by Citigroup Global Markets Limited at any time in whole or in part to one or more qualified institutional buyers (as defined in Rule 144A under the Securities Act), and further sold or transferred by any such subsequent holder(s) from time to time.]

                    3. Justin, That is not the KTBA prospectus and is not KTBA. This appears to be the old KTBC, that one was has already been redeemed, courtesy of those call warrants you sited. You sited a 2001 issuance already redeemed. KTBA was issued in 1999.
                      See this old Bell South issuance had several of these trust preferreds created from it, most being redeemed via call warrants years ago. KTBA hasnt, because it doesnt have call warrants to exercise.

                    4. How did I miss that…
                      This is KTBA’s.
                      Similar language as to exchange the certificates for the underlying bonds.
                      So Citigroup seems to be the only one who can convert.
                      Page S-10.
                      AFFILIATE EXCHANGE RIGHT

                      Any affiliate of the Depositor, but not the Depositor itself, will have
                      the right, subject to the limitations contained in the Trust Agreement, on any date to tender to the Trustee Certificates of a specified principal amount and to receive in exchange Underlying Debentures equal to such principal amount.

                    5. That is the only part I saw concerning so it causes reflection. But you notice it doesnt mention call warrant holders such as any other trust preferred including the original link of KTBC you posted.
                      And all others were redeemed yet this older one wasnt. The “limitations” may be more exacting and might not make this one redeemable in that manner. Also Quantum contacted US Bank trust executor of KTBA issue back a decade ago and was confirmed to be noncallable. Anything is possible, but gun to my head last dollar bet, Im going with it still outstanding 10 years from now. I hope it isnt loaded, lol.

                    6. An exchange right is not a call warrant. An affiliate could buy certificates in the open market and then swap them to the trust for the underlying bonds, which are worth more, for an arbitrage opportunity. Since there are no SEC filings for KTBA, I have no idea if any exchanges have occurred, but I would guess not because there’s a pretty large gap between KTBA and the underlying if someone could be executing a simple arbitrage.

                      Either way, this can’t impact YOUR shares of KTBA.

                  2. Karma, they used to have filings, but they quit and it became delisted. That is how it wound up on OTC years ago.

                    1. found these two filings relating to the proposed exchanges of AT&T debt for the various companies.
                      142 million of these bonds were outstanding in December 2017.

                      the exchanged amount is in this document
                      $45,534,000 aggregate principal amount of BellSouth Telecom December 1, 2095 Notes;

                      so a little less than 95 million of these are still floating around as BellSouth, of which 50 million is locked up in KTBA.

                      Even with the delisting, Citibank has to eat the yearly trustee fees for decades.

                    2. I have kind of followed this one with odd amusement for some reason over the years. T actually has the issue trimmed to $77 million, overall. I doubt it will go much lower from here.
                      Walmart has an old bond that matures next decade and cant get it all redeemed either. That one is a 7.5% bond and some of that is still trapped in a synthetic trust debt GJO.

                    3. Grid – Though I’ve never owned KTBA partially because I’ve never understood the whole issue of call warrants (do they exist or don’t they?) but also because of the long maturity, I have owned GJO for years because of the underlying 7.55%’s maturity due in 2030 and also because it seemed to be the most clearly non-callable of all the structured product spinoff issues… I see from FINRA that there’s only $469 million still outstanding from an original issue size of $1 bil… Do you happen to know how they got those retired??? Have they had tenders for the issue?

                      GJO’s probably not much of a justifiable hold at its present price, and certainly doesn’t yield much, but given it’s floating rate, maybe there’s possibly a justifiable reason to continue holding it going forward other than sloth..

                    4. 2WR, They constantly offer tenders and dont give up, ha.
                      I liked GJO when it was $18-$20, and traded it. There just isnt enough yield or trade juice in it now for me. But, unlike KTBA whose entire share count is untouched, GJO has had serious erosion of shares outstanding.
                      Most occurred during 2008-09 period. I hadnt researched the cause of genesis of those being redeemed though.

            3. ATT might not be able to retire the bonds held in KTBA, but they certainly could buy KTBA as a tender or in the market and hold as an investment.

              1. Maybe ATT can’t buy this because they don’t qualify as an “expert”? That would fit right in.

                1. This issue used to be a huge float but its mostly bought up. About 75% of float is tied up in KTBA. Typically on these all shareholders must approve a tender. This is why I suspect its never been tendered to because you cant get all to approve.

                  1. Third party trust preferreds CAN accept any tender offer, but as you say they generally require 100% of certificates approving, which is essentially impossible. I vaguely recall some years ago getting a letter from a trustee about a tender to the underlying bond on an issue like this, so it seems that the trustees may actually go through the motions even though they know it will never be accepted.

                    KTBA at $28-29 is a good value if you can buy it somewhere and have a 74-year holding period! There shouldn’t be any worries about it being called, tendered, etc., because the underlying is not callable, KTBA is not callable, and if somehow a tender was accepted it would only be done because the tender price is well above the KTBA market price. KTBA prospectus doesn’t mention a make whole call so I assume there isn’t one (which makes sense because it was an investment grade issuer AND because there aren’t any 100-year Treasury bond yields to compare to), but that would be your dream come true if you could get 74 years of 7% coupons discounted at Treasury rates.

    3. My experience echoes others: Schwab has allowed certain orders which E*, TDA, and Vgd did not. Re KTBA:
      – I placed a Limit Day Order order late in the day at the last execution price (29).
      – Schwab cancelled it 3 minutes later
      – I then placed a Limit Day Order at 29.25. This time I had to click a checkbox confirming that I understood I was placing an order higher than the most recent bid.
      – Schwab did not cancel the order
      – It did not fill and expired as usual

      I am guessing that checkbox (CYA on Schwab’s behalf) is what actually counted, but in turn it only appeared once the bid was higher than most recent.

  23. Anyone who wishes to file a comment/ complaint about the restricted list 15C2-11 / supplement should send an email to:
    I did so. The more that complain about the list the better the chance that
    they will take issues off that do not belong, such as AGRIP, SLMNP,
    new preferred issues trading on the OTC boards with temporary symbols, etc.

    1. Howard, FWIW, I just sent one. It wont carry much weight since it was mean spirited, insulting, and ridiculing their basic intelligence level.

    2. Anyone who wishes to write the SEC…feel free to use my letter :

      I am writing about the new OTC rule 15c2-11. Who wrote this??? I know it is intended to “protect” investors from penny stocks and bankrupt companies, but the list also includes quite a few preferred stocks which pay income and which we seniors rely on. This includes SLMNP, a preferred of a subsidiary of Lyondell Basell…one of the largest chemical companies with a market cap of 44 billion. Also included is KTBA, which holds bonds issued by BellSouth…a subsidiary of AT&T. I trust you have heard of them.

      I would appreciate any efforts to remove any securities such as these which currently pay income from the restrictive list. The rule is a hindrance to investors holding these securities.

      1. Just thinking outloud, I wonder whether or not a commonly written letter sent by multiple people might actually be more effective than individually written letters? Were the same letter received from multiple individual investors, it might be recognized as being representative of a larger group, thus potentially offering more of a sense of “power.” from the senders, for want of a better word, to those who read it.. just a thought. It might even be more effective than a jointly signed letter..

      2. Since only a secretary who possibly may at best read the first sentence, I wrote mine mostly to humor myself.
        This should not be used to as an alternative to Retired Brokers, ha.

        Thanks for destroying small investors income and portfolio value and letting the “experts” soak up the profits. Your ill advised numb nut ruling has forced such high quality issues such as Ocean Spray preferreds (continuous payments for over 75 years) Dayton and Michigan Railroad DMRRP (continuous payments since 1865), and even quasi government investment grade preferreds such as AGRIP become untradeable.
        With smart people like you “protecting us”, heaven help us if “dumb” people ever take your positions of command.

        1. As much as I love your letter, Grid, and can imagine wanting to write an equally snide one myself not masking true feelings, I, and I suspect you, am not advocating a mass mailing of this letter… ha! I can see a variation of a letter like this being proper to send collectively to a now banned from mentioning, always right prolific commentor at another website who also seems to be well qualified to protect people from profits, though.. He could work for the SEC as an expert for sure…

          1. 2WR, They loved it..I already got a response back, lol…
            Thank you for your e-mail to the Chair’s Office of the U.S. Securities and Exchange Commission. Your comments and concerns are very important to us. Unfortunately, because of the large volume of e-mail received, the Chair cannot personally respond to each message. We do read and carefully consider the opinions expressed in all of the e-mails that we receive.

            If you are an investor with a complaint about a securities professional, firm or a public company, please visit our Complaint Center, at http://www.sec.gov/complaint.shtml, to file a complaint. Investor information, including an introduction to the securities markets, how they work, the role of the SEC, investing basics and a variety of tools to aid investors, is available at http://www.investor.gov. In addition, if you have a securities-related question, please visit our website at http://www.sec.gov/answers.shtml to find fast answers to questions and solutions to common investment problems. If you are a securities professional needing assistance on technical matters, please check our website, http://www.sec.gov, and click on the “information for” pages link located in the bottom center of the home page.

            We deeply appreciate your taking the time to communicate your thoughts and concerns to the Securities and Exchange Commission.


            Lori Schock
            Office of Investor Education and Advocacy
            U.S. Securities and Exchange Commission

      3. As I have noted previously, AGRIP, (Agribank Farm Credit Bank) , a GSE, is on the list, so a component of the Government Farm Credit System is too dangerous for private investors to hold. Obviously the SEC does not even trust products that are ‘related’ to the Government. This is what happens when a bureaucracy runs the show.

      4. Retired Broker:
        As you know, the modified SEC Rule 15c2-11 has resulted in the SEC placing KTBA into the “restricted security” category, and major brokerage firms (Schwab, Fidelity, etc.) are not allowing the public to purchase KTBA. Brokerages are, however, allowing a individuals investors of KTBA to sell (“all or none” transactions only). This has caused KTBA price to nosedive due its illiquidity. I have tried unsuccessfully to find out who the buyer of these “all or none” transactions are without success., and am hoping you might know. The reason KTBA has been classified by the SEC is evidently due to the lack of reports being filed and therefore the lack of transparency. I do not know if AT&T or Citigroup is the guilty party not filing these reports (wish I knew) and am wondering if there may be some kind of collusion going on behind the scenes that will enable AT&T to acquire KTBA shares. For example, is AT&T (and or Citigroup) deliberately not filing the required disclosures with the SEC in order to somehow get back all outstanding KTBA shares. Would appreciate your understanding of whether such a strategy is at play here, and whatever else you may have found out about this mess.

  24. Golar LNG Partners LP Series A Preferred Cash Distribution
    October 26, 2021 at 4:15 PM EDT

    NEW YORK–(BUSINESS WIRE)–Golar LNG Partners LP, an indirect subsidiary of New Fortress Energy Inc. (NASDAQ: NFE), has declared a cash distribution of $0.546875 per unit of 8.75% Series A Cumulative Redeemable Preferred Units for the period from August 14, 2021 through November 12, 2021. This will be payable on November 15, 2021 to all Series A preferred unitholders of record as of November 8, 2021.


    It looks like the company managed to timely get the dividend announcement to FINRA, which is a relief, meaning that we should avoid the payment delay that took place with the August dividend.

    https://otce.finra.org/otce/dailyList?viewType=Dividends%2FDistributions%2FSplits (scroll or filter by symbol).

    Unfortunately, I have no update on the 15c2-11 situation. I’ve pestered Josh Kane and Chris Guinta at NFE enough, and decided that they’ll either deal with it in due course, or not.

    1. I’d like to buy more golar, but can’t find a place to take the order. But stock is being sold, so someplace, somehow somebody is buying it. Does anyone know if Ally can handle this type of buy order?

  25. This new rule is getting ridiculous. I went to place an order at TDA for the new BOA preferred, BOAPV, and TDA rejected for the following reason. Order rejected: No opening transactions are allowed on securities affected by amendments to SEC Rule 15c2-11. Is this really correct or is TDA being overally cautious. I tried to buy the new EIC preferred and got the same message. There are comments mentioning purchase at other brokers. Is there something special you need to do?

    1. Gmac–I bought at eTrade this morning–nothing special–just like always. I placed a Fido order (haven’t checked to see if it executed, but placing the order was normal. I think some of these brokers are simply covering their asses and not doing their homework on these issues.

      1. I tried unsuccessfully to place an order yesterday with E*TRADE for MNSLV. Rejected due to 15c2-11. Today I tried again and it went through no problem. ¯\_(ツ)_/¯.

      2. It seems that some brokers like TDA are slower than others in putting new issues into the correct bucket for the new SEC rule. Today at TDA, you can place an order but yesterday you could not. Hopefully they get this figured out. I think the new rule was to benefit a few that have expert trading access and not to help all traders. A simply disclosure acknowledgement that the security does not have current information is adequate. All investors need to do their research to be comfortable with the risks they are taking.

        I also really appreciate the sight and have gained a lot of knowledge and ideas over the past years.

    2. SEC regulations 15c-211 have killed OTC reinstatement/ custodianship/reverse merger plays since normally the shells used for such have no info on file. All of the stocks/shells that have gone to the expert market are NOT junk. Many of them were opportunities. For those of you familiar with custodianship/reverse merger plays……I recently ran across filings from David Lazar who filed for custodianship of a shell (stock symbol ZENO) As many of you know that used to play these before the regulations to “protect” us took hold, the filing for motion of custodianship is the bottom floor buying opportunity for these plays. You accumulate until the motion is approved, then accumulate even more until motion to terminate custodianship is filed (which means the custodian has found a reverse merger deal) when filings come out that reflect an incoming merger, you can make thousands of percents gains on your initial investment. Well….no more. However, what I did notice with ZENO is that the day after the filing for motion of custodianship, it traded over 300k shares on the expert market at PPS between .0007 and .006 and it is now being accumulated. In other words, these “sophisticated investors” are now buying the stocks that were once available to us……and by the time the shell custodian brings the shell to pink limited or pink current, you will see from the very first day an insane gap on bid/ask. We are seeing stocks like ZENO with a small O/S count and float starting out with an ask of a dollar or even dollars. Not bad gains for those “experts who loaded up at triple and double zeros range. In a nutshell guys, they have stolen our market right out from under us. I am amazed by the lack of anger in the OTC market. This is corrupt AF and it looks like they are going to get away with it. They had the expert market planned all along. This expert market also lets them get away with never covering any of the shorts they have amassed on many of these penny stocks throughout the years. We are now seeing many Twitter OTC players pumping garbage (OTC Filers Of Garbage) with billions of shares outstanding. When will they catch on? When will the lawsuits begin?

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