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.

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

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

  1. 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.)

  2. 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.

  3. 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.

  4. 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 …

  5. 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.


  6. 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.

  7. 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

  8. 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

  9. 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.

  10. 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.

  11. 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.

  12. 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.”


  13. 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.

  14. 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!

  15. 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.

  16. 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.

  17. 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?

  18. 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?

  19. I have several stocks I own that have fallen under the 15c2-11 OTC rulling and would love to buy more at these ridiculosly low levels. Are there any brokers you know who will trade the expert market? thanks so much

    1. I have come to the conclusion for expert market stocks that have now fallen under the new rule that you require a full service broker to buy them. That also means you have to deal with all the other bull crap that goes with that like fees and who knows what else.

      I also concluded that my time is better spent trying to find bargains that fit my budget on more main stream markets and make sure I can at least continue to buy OTC pink new issues. Grey/expert might now very well be off limits and frankly 99% is crap. The new EICPV is an example of a new issue I failed to buy on the grey today. Why it was on the grey is beyond me. While that new Morgan Stanley preferred was pink with info.

  20. Have we come to any conclusion which broker is the most useful when it comes to buying new preferred on the OTC for example? I keep seeing Schwab being mentioned as a possibility. Is there a consensus yet or to early to tell?

    1. I just tried unsuccessfully to buy the new Morgan Stanley issue at E*TRADE and TDA. Both prevented me from doing so by claiming that MNSLV runs afoul of 15c2-11. Schwab allowed me to place the order.

      1. I will try MNSLV tomorrow as that appears to be on the PINK while EICPV was on the grey. Good test with Ally (tradeking).

    1. Yes, but given that the last prior quote before going ex was 1007 or so, SLMNP is actually up today with a quote at 995.

    2. So odd to dump this preferred at this stage. How could you be comfortable holding in the recent past when it was pink otc to begin with. It was already dumpster diving in the first place. You can sell anytime, no signs it will stop paying, etc…

      Just sucks we can’t access these deals.

  21. Nearly all of the discussion on III about rule 15C2-11 has focused on the negative aspects. The most notable point is that most retail investors are not able to buy these issues. And if they want to sell, they might get taken to the cleaners due to no bid/ask prices being quoted and selling into a “dark pool” environment.

    What we forget is that for every “loser” that makes a trade, presumably there is a “winner.” What prompted this is today’s (10/14) trading in GMLPF. There were 15 trades today ranging from 23.90 to 24.30. Let’s call all of those “fair value” trades. Then 10 minutes before the close a 411 share trade went through @ 18.0375. If ~ 24.10 is the right value, somebody just pocketed ~ $2,500! Not quite enough to buy a Yugo, but it will sure buy many steak dinners with nice wine.

    Why have we NOT heard anything from winners like this? And how much lobbying power do they have compared to the small “losing” investors? Unknowable at this point, but it would not be surprising if the winners have more clout than the losers.

    We do have microscopic amounts of GMLPF in a few accounts but were NOT involved with the trades today, nor do we have any open orders.

    1. Hey there Tex the 2nd – I had GMLPF going in a StreetSmart Edge ticker / window today and noticed the same (odd) transaction. Took a screen shot because it seemed so peculiar. Funny thing is that neither Schwab nor TDA nor OTCMarkets.com “saw” or reported that trade, and all three report the official close for the day was $24.04, despite that $18.0375 at 15:49 p.m. being the last trade of the day. It’s like it didn’t count for some reason. Any idea why this is?

      While we’re talking 15c2-11 again, I’d be very curious to hear your take on how / whether the January 3, 2022 effective date of the rule will affect the “real” bond market. Do you suppose it will affect trading in (say) that Advisor Group senior note? (Link: http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C840849&symbol=ADVS4866959 .)

      I’m also wondering whether companies that are currently “dark” will have any motivation to file public financials after the effective date kicks in early next year to ensure their bonds trade. What do you or others think?

      Link to the no-enforcement order: https://www.sec.gov/files/rule-15c2-11-fixed-income-securities-092421.pdf

      SIFMA statement re same: https://www.sifma.org/resources/news/sifma-statement-on-sec-no-action-letter-regarding-amended-rule-15c2-11-in-relation-to-fixed-income-securities/

      1. ES, the trade reporting on GMLPF today is rather strange. Of the eight sources I checked, all report the close as being $24.04, when we can see that the last trade was @ $18.0375. Yet all of them report the low today @ $18.0375.

        Its a long answer, but I might have an explanation for how the discrepancy can show up.

        As for bond reporting on January 3, 2022, my pure guess is that the rule will be waived. The reason is that I think enough large mutual fund/ETF managers will have the clout to stop it. And we really do NOT know how many bonds would fall under the rule. Getting an accurate NAV for a bond ETF is challenging even before this rule is implemented. For example, bond ETF’s traded last Monday 10/11, but NONE of the individual USA based bonds they hold were traded. So how did they accurately calculate real time NAV’s for the ETF creation/redemption? You can imagine trying to set NAV if some individual bonds are bouncing around like GMPLF did today.

        That said, Gary Gensler is a man on a mission. This week Bloomberg ran a story on his goals at the SEC. They are very ambitious and he has a take no prisoners approach. So there is some percent chance, he will tell bond fund managers to take a hike.

        Bottom line to me is that the bond constituents will have a lot more clout than the III type stock investors. And unfortunately, I suspect that some of the prominent brokerages, notably Fidelity, WILL support keeping the stock restrictions in place. Hope I am wrong and that Jason’s article catches enough attention to get the SEC to act.

        1. Tex, others – I spotted some interesting commentary about 15c2-11 in today’s conference call from MarketAxess (MKTX):


          Here’s a snippet, but it’s better to read it in context:

          “And the other thing that market participants have gotten comfortable with is that the majority of corporate bonds probably are not going to create an issue and those are from public companies that are issuing bonds because the fields that broker dealers are required to validate that they have the information for readily available for public companies. Some of the private securities 144As and Reg S bonds are still subject to some interpretation, and that’s where the area of focus is now. Large market areas like munis and treasuries have been exempted.

          So I think when all is said and done, we’re going to be into a very small sliver of the US market as that could be impacted by the rule and of course, we’re hoping that the SEC will respond to some of the industry concerns about really publishing quotes to promote transparency and in some cases, electronic trading that should be available for all fixed income securities and especially for institutional market participants. So that’s what we know about where it stands right now.”

    2. Another day, another low ball trade on GMLPF. This one was 566 shares @ $21.00 during the middle of the trading day. Price was roughly 24.05 before and after this trade, so somebody pocketed ~ $1,700 on this trade. If it was the same trader that pocked the ~ $2,500 yesterday, not bad for a two day haul.

      Of all the “Pink No Info” issues, I don’t know GMLPF stands out for these lowball trades.

      We were not involved in any of the trades yesterday or today.

      1. I have a theory, based partly on that Jason Zweig WSJ article and partly on simple observation, that the reason GMLPF is “dark” is not because they haven’t filed updated financials (they have; see https://ir.newfortressenergy.com/static-files/85a087a5-2221-473e-be32-1abc9082a8cb) but they haven’t filed updated financials *with OTC Markets Group*.

        Look, Ma, no financial reports or current SEC filings! https://www.otcmarkets.com/stock/GMLPF/disclosure

        From what I can tell, if they’d pay the $1K application fee and the $5K annual fee (see https://www.colonialstock.com/otc-listings.htm) and file their financials with OTCmarkets.com, they’d be back in good “Pink, Current” graces. OTC Markets Group can hardly be expected to proactively go out and look for financial filings for companies located all over the world …

        What say? Too simplistic?

        1. not simplistic but incorrect. they dont need to be published on OTCM, the end result is the same but the review process is slow.

    1. Excellent article from the well respected Jason Zweig. He is widely read so it will be interesting to see if there is any fallout from the story.

      So far most of the trades on these that I have seen are “look out below” where I am guessing a retail investor said “sell” and the broker only allowed market orders. Today is the first day I see a microscopic trade in the other direction. AFSIA only had 5 trades all day long. The first two trades were 30 and 100 shares @ 16.25. The next two trades were 400/100 @ 18.00 and 19.99. Both appear to be outliers on the upside. Easy to understand how you can have “look out below” trades but not clear to me how you can spike to the upside. And yes, this is on a $25 par issue, so we shouldn’t get too excited about a $19.99 trade.

      Nice that III got 15 seconds of fame there!

      We do NOT own AFSIA in any account or have any open orders, so I am NOT trying to hype it one direction or the other.

    2. Tim,

      I’m sure we would all appreciate it if you contacted Jason Zweig at WSJ and see if he’d be interested in doing a follow up article with quotes from you. Surprised he did not reach out to you to get your comments the first time around. You could talk about KTBA — ATT bonds that have gone dark. Or some of the utility issues Gridbird tracks.

      Another commenter here has screen shots documenting the wacky trading in some issues like GMLPF which has flip flopped between expert and regular markets. Maybe he would include those pics in a follow up.

    1. Apparently it is. Something has also changed with FIISO, which OTC calls ‘pink’ but FIISO is now also grayed out on thinkorswim. I’m glad I don’t own much of either. This is a continuing goat rope. And for who knows how long.

    2. It is and it isn’t. Putting in the ticker symbol, it says “Pink.” * Going to the quote page, it says “Expert Market.”

      FWIW – It was trading normally this AM, no problems. However, check back later. With the SEC and OTC Markets directing, the new “Investor Protection” movie now screening will likely have as many twists and turns as a high-speed road chase in a James Bond movie.

      *Update – GMLPF now showing Double Diamond when you plug in the ticker. Paragraph 2 was correct!

  22. September 28, 2021 – Tuesday of last week – marked the effective date of SEC Rule 15c2-11. It was an extraordinary week in terms of revealing how ineptly this transition was handled by the SEC, brokerages, and OTCMarkets.com.

    Using screen shots, I have documented some of the wild market swings that took place last week in various issues that I follow (and not necessarily own). I took screen shots of the steep selloff in the AmTrust issues (shareholders there were totally blindsided by the change from Pink, Current to Expert Market); I also captured the GMLPF Tuesday morning trip down to $20.00 (and the Wednesday / Thursday / Friday resurrection); and I got shots of the LTS issues, where at least the slow selloff was telegraphed over the summer.

    At some point, there will be a reckoning for this mess. I think it would be smart to document how the SEC “helped” and “protected” fixed income investors. I’d be grateful if my fellow investors would do the same for the affected issues that you follow. You never know when they might come in handy down the line, and the swings last week were wild enough that they should be preserved as evidence.

    1. I am hoping to track down the trading data for GMLPF and the various securities within the AmTrust and the LTS issues for the week of September 27 through October 1, 2021, preferably in Excel-compatible format.

      Can anyone give me any pointers on how to obtain this information?

      Thanks in advance.

      1. Go to OTCmarkets. Enter the ticker and scan down to “Trade Data”. Shows market trades in the stock.

    1. af,
      Could you please tell me who is your full service broker? I have been shut out out of a couple of IPO’s for having a discount broker.

      1. I have several retail brokers, and I have done business with them for 40 years. In order to get the IPOs and secondary offerings that I want, I have to take many deals that I do not want — including many losers. They just don’t give away large amounts of free money associated with the hot IPOs. In the end, the brokers and I both come out way ahead, but there’s a lot of give and take. I am not a huge player like an institution, but I accept a very low profit margin because I take very little inventory risk.

    2. I know it sounded inflamatory and paranoid when I posted that we are being herded, but the evidence indicates just that. The cowboys do not want the cows running THEIR ranch.
      THAT’S the American Way!

    3. I’ve been unable to find a broker to trade expert markets. I have several stocks who have fallen into this category and want to buy. Did you have any success? Thanks

  23. Another oddity with WTREP today – I thought I had something exciting to report as I noticed TDA’s ThinkOrSwim platform added back the value of my WTREP positions into my accounts today. However, I guess TOS isn’t communicating with TDA today because when checking my account’s value on the website had WTREP still valued at zero, zip, nada….. Don’t you just feel so much better having all this noise going on causing nothing but unnecessary agita?

    1. 2WR, I have some good advise so pay close attention. Do not panic and sell your WTREP shares. At current $0.00 price, you literally would be giving them away, so hang tough. 😂

      1. What would I do without you and your sage wisdom, Grid? … I was this close to pushing the sell button at $0.00….. ha. BTW, where are people seeing “expert market” quotes or trades? that’ll just add to the no soup for me fun..

    2. WTREP has a distribution day tomorrow Sept 30. I’m sure they’ll be some more drama around that. Probably won’t show up on time and without hassle, but hoping for the best…. My TD account today does show the value back up again from zero yesterday.

      1. George – How are you checking TDA account? If I look via logging into the website, my account still shows 0.00 on WTREP, But still today, as it was yesterday, if I check via ThinkOrSwim, it shows the value of 25.09 restored.

        1. Ahhh, yes, same here. On TOS it shows up at 25.09, but on the website it doesn’t show up and has a zero value..

  24. The ironic thing is only a basic minimum amount of time and effort by management should keep them off the hit list.
    Take an issue I just bought again today (I trade it frequently as bid and ask is usually so wide a truck can drive through it. NSYC….
    It skates by on “Pink Limited Information”. All it does is submit its skimpy annual financials to OTC every year and they post it.
    A very simple financial statement from a simple stockyard company with land they are selling from another stockyard that closed shop many decades ago. It has been around for well over a 100 years, and has a tiny float of about 43,000 shares. But this is all that is really needed to stay in good graces apparently… For today anyways, ha.

    1. I posted a comment on the Reader Initiated Alert section today, stating that AGRIP, Agribank, a GSE, cannot be traded on TDA. A Govt sponsored entity with over $100B in assets owed by numerous
      institutions, etc and essentially a Govt product isn’t fit for trading because the OTC board shows it ‘dark’. I don’t know the rule , but does a govt entity have to file financials with the SEC, because obviously this one does not. We are in fantasy land. Thanks

  25. I was looking for a final list of 15c2-11 stocks from the SEC and all I could find was the final rule (297 pages). There may be a link buried in the rule but on a quick perusal I couldn’t find it. The most recent list of proposed restricted stocks that I could find is from TD.

    The link to the rule is: https://www.sec.gov/rules/final/2020/33-10842.pdf
    The link to the TD stock list as of 092021 is (may be updated from Justin’s post?): https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA101550.pdf

    If anyone comes across the final “official” list, please post it.

  26. I’ve been watching from afar and letting the my decisions emerge from the froth once the tide goes out and exposes a bit more of the motives. I have always thought that that was a good idea in almost any analysis.
    Seems the hallmark of the American markets have been: Access, Fairness, Breadth, Transparency to price discovery, and I will add Timeliness now that electronics are in the game.
    THAT ALL is changing. I would have to say that there is a movement towards Territory Control and considered Capital Flight Contingency. There’s a whiff of panic in government; you can tell by their actions. Development of Emergency Scenarios for every department are all the rage with the War Mentality Government.
    The herd is slowly being herded into narrower pastures. Capital and Capital Management is on a very narrow base historically. Acceptance of lockdown has been part of that training too. That is fact, not personal statement.
    Gensler is new, I took an e-course this COVID season with him as professor. Not a good match of personality from my perspective with Sargent Dow Jones.
    The winds of change HAVE begun blowing. America is ONLY about ONE thing: MONEY and its control.
    PS: To a comment above: Marian McPartland is another well known McPartland, a great talent!

  27. LTSH just traded 100 shares @ 12.00, down from yesterday’s close of 18.70. A nice 35.8% haircut thanks to the new rule.

      1. Saw SLMNP on TD Ameritrade today. They listed it as “Over the Counter Market.” They reported high, low, closing price ($1006.06 up .06), volume of 27 shares and bid, ask. Things seem to change on a daily basis. They are showing pertinent details on my Positions page. Haven’t tried to buy any more shares yet though.

        1. I’ve put in a bid for 1 share @ 995 for the past 2 days. They have been rejected immediately with a little note about the new rule at the top of the rejection.


    1. Tex, on a positive note a bid of over 18 came out after that and was left unmolested the rest of the day.

  28. I’m seeing volume for issues on the expert market like SLMNP and KTBA. I assume this means they are being “actively” traded over there. KTBA showing a last trade at 30, SLMNP at 1015 and GMLPF at 22.40. Someone was prepared to buy these on the cheap on the expert market.

    1. Merrill actually let me buy ktba at 30, and then place a sell order for it! No go on slmnp though.
      Vanguard assured me that they will help me send sell orders to the expert market if I want to dump, but only on a day order basis, and I have to pick my own limit based on their last trade indicator.

    2. I just bought a couple shares of SLMNP at 1010 at ally invest just now. I will try 1000 next. lol

  29. With WTREP now being deemed worthless at brokerage houses, if you own it in an IRA is anyone going to try moving it to their Roth account or open a Roth account using WTREP for funding??? If one does that, and WTREP gets called relatively quickly thereafter, wouldn’t you then be restricted from having access to those funds for withdrawal for a period of time something like 5 years? Just wondering………. There’s got to be something good to come from this ridiculousness and either that or the decrease in IRA assets for next year’s RMD might be that goodness..

    1. Now I dont presently own KTBA, but that would pi$$ me off. That is just wrong. That truly is an ATT direct obligation and they assumed it. This is just computer garbage entered and thus garbage outcome. Its just a trust mechanism held at a bank with these bonds. There is nothing to report. In fact when filings were made back in day, on they reported to look at ATT financials.

      1. Well…I do own KTBA, and it really would piss me off. Seems to me that either ATT or Citi (Citi sub Smith Barney brought this to market) should make a market. In any case, I’m not selling. I think a market will develop either by ATT doing the right thing or something else. ATT made a tender for the underlying bond a couple of years ago at an equivalent price of $35 for KTBA if I recall correctly.

        Nanny state of Fidelity cancelled all of my KTBA orders prior to opening today.

        1. I dumped my small KTBA position today at $31. You other guys can fish for these dead in the water expert market stocks. I am not locking up funds that I may never be able to sell except at a big loss.

          Maybe they fix KTBA down the road but I don’t care. One thing I have learned is when a situation changes, get out and ask questions / reassess later

          Also didn’t hurt that I had originally bought the shares a tad over $30. So locked in that gain plus whatever dividends I have already collected

          1. Also sold KTBA today, Maverick (and SLMNP). Agree w/you 100% about not locking up funds possibly forever. If it gets straightened out, great, I’ll be back for them. But I took my gains and I’m happy to have the cash for now.

        2. I was asleep at the wheel and did not take any action on my 1800 KTBA. I should have sold the last week in September when there was a market. Schwab accepted a 100 share sell offer yesterday (no action), but I see no trades this week and price still quoted at $30 as last trade, possible carryover from last week.

          Is there anything that I can do rather than hold on and draw interest? I am 80 and I suppose that the IRA holding the KTBA will pass on to my beneficiary upon my death. I wonder what will happen should the IRA be drawn down to where the KTBA is the sole asset and there is still a required distribution?

          1. codger – sorry to hear about that. If it comes to that, you can distribute the stock “in kind” to a taxable account and pay taxes (if it’s came from a traditional IRA) on the value on the day that happens. Who knows what price they might use, but maybe it’s a lower one.

            Meanwhile, feel free to email Jason Zweig at the WSJ about how happy you are about the SEC protecting you from having a market for your retirement assets. Unlike the SEC, he actually cares.

          2. I think some of have been sold for around $30.10 today. I have an outstanding bid for $30.01 and has not hit today. It did earlier in the week where I did pick up some. I have 15 yrs to retirement, so I am open to picking some up and keeping in my sock drawer 🙂

            1. I appreciate the insights presented re KTBA marketability.
              Schwab did sell a few shares for me today at $30.10. Since there seems to be a market I am holding rest of position in anticipation of $0.875 dividend next month.

          3. Codger, you may still be able to sell your KBTA if you really want to. I was able to sell AATRL on Schwab the other day with simply a limit order.

            Schwab won’t show any trades, but the OTC shows there has been volume in KBTA at the $30 price point for the past several days.

            Put in a limit order at $30 and see what happens. Or undercut it somewhere in the $29s, if you really want to see it sell.

          4. Codger…if you have a Schwab account you can get Street Smart Pro. That will enable you to see trades on KTBA…although bid ask is a black hole. There have been six trades in KTBA today…all at 30.10. One trade for 700 shares..the others were all under 100 shares.

          5. There are currently 11 trades today of KTBA – most at $30.10

            If you have Fidelity, you can still get Time and Sales data in Fidelity Active Trader Pro

            You won’t see a bid and ask shown – but you will know what the trades are being made at. You should be able to enter a sell order – just set your limit price close to where the trades are being made and hopefully someone will pick them up

            I dumped all my KTBA back in September at $31 and change when they first moved to the expert market

  30. Ok, more listings from OTCMarkets.
    this was posted on the evening of 9/27.

    It is an excel file containing listings of a lot (or all) of the OTC Market securities and their current status.
    One other little trick.
    you can sign up for Versioista at versionista.com for the free account and they will monitor the website for you and alert when there are any changes

    1. Thanks Justin. Based on that large and unwieldy spreadsheet, the following tickers might be preferreds that are no longer quotable.


    2. Thanks Justin. Based on that large unwieldy spreadsheet, I believe these might be preferreds that are no longer eligible for quotes.


        1. VNO-O yeah. I was worried another consequence of this SEC rule might be to wrecked the otc market for new issues for retail investors if those are generally ineligible. Of course VNOOP shows as Pink Current so it should be quotable, not that I’ve tried anywhere.

    3. Anybody know of a work around to open this file if you don’t pay for Microsoft office?

      1. https://www.openoffice.org/

        it is the free open source version to read Microsoft stuff. Excel, word, etc.. Everyone uses it. Super popular. Safe. It is basically a clone of MS Office. It can read and write their files. I have it on every PC I have owned for a very long time now.

  31. Sorry, meant to post this in the 15c2-11 chain originally, so this is a repost:

    Is it OK to swear on this board?


    GMLPF has moved to the expert market with no warning. I spoke for 15 minutes on August 23rd with Josh Kane (head of NFE IR) and Chris Guinta (NFE CFO) to warn them of this possibility, and dammit, they let it slide.

    I am reassured somewhat by their assertions during this call that NFE is all in favor of full financial disclosure (and by the fact that they posted GMLP financials on the NFE IR web site), but dammit, it didn’t have to happen this way.
    Now that I have expressed my initial irritation, I have to also say that this entire 15c2-11 implementation has been absolutely cack-handed. From the SEC to the brokerages to OTCMarkets’ absurdly inept treatment of these issues (witness the AmTrust BS today – fortunately no position there) I am more than a little ticked off.

    1. esw3

      “But they are who we thought they were! And we let ’em off the hook!”
      Dennis Green

      I have some GMLPF.

      This whole thing has been a comedy of errors. Needless confusion and suffering for all involved. Who is buying all these shares on the cheap?

      Seems kind of fishy given the antics of the two Fed heads that are “retiring” after some questions regarding “ethics”. What a JOKE.

      The new FINRA guy was well known from the CFTC and let’s just say he was not beloved either.

      1. That’s great news that they are making an effort. There is no reason for them to post financials for 6/30 which are after the merger closed, unless they are doing it to comply with these silly rules. So maybe OTC markets will adjust this so that GMLP can be quoted.

        As long as GMLP is outstanding, NFE has to keep doing separate financials for the MLP, since they have to do K-1s for GMLP holders.

        1. JD:

          Not sure why OTC markets would be incentivized to bring GMLPF back. The bid-ask spreads on these “Expert” Market securities are 10-20%. I watched GMLPF trades today – buyers and sellers were truly getting raped. GMLPF was Bid $20, and Ask $22.15.

          If the Expert Market dealer buys 100 shares for their own account from a market seller, they are cleaning up on anyone crazy enough to put in market buy orders.

          They are banking commissions/spreads they once only dreamed about! This Expert Market is like the wild, wild West on steroids.

          1. Rob, the bid and ask prices you saw on GMLPF were “stale.” They were from yesterday. On the issues I looked at today, there were NO valid, accurate bid or ask prices.

          1. I keep refreshing the page to make sure it hasn’t changed back (lol), what a cf this has been on many levels.

    1. Grid, no problem! They have changed them to Double Black Diamonds just like what you ski on! Put your boots on, get your poles ready and you will a certifiable expert ready to go . .

    2. Since the company was trying to buy them from me… this might be their chance to pick them up on the dip and finish the job. Maybe I’ll get another letter asking if I want to sell to them again for fire sale prices.

  32. Gmlpf just got switched to dark, and is listed as expert market. Talk about changing the rules at the last second.

    Also vanguard emailed me to say my slmnp sell order will be cancelled tomorrow due to corporate action.
    So we can’t even leave sell orders out there for whomever might want them?

  33. E*Trade just cancelled my GTC buy order for AATRL, and when I try and enter a new buy order it shows it as “Pink No Information”. I could have sworn it was not on the list last I checked, but maybe I just missed it, because there it is now.

    I have some AATRL as a “sock drawer” issue in a Roth. I guess that means it will be cemented to the bottom of the sock drawer. At least until 2037.

  34. I just sat down at my computer, and logged in to Fidelity. After a few minutes, I saw five orders…but they weren’t orders….Fidelity unilaterally cancelled all of my buys I had in for SLMNP below the market.

      1. So with SLMNP is there the expectation that it will ever trade again, without a rule change or company starts reporting? Or will it be impossible to get out of it (without tendering back to the company) and we will be stuck for life?

        1. I had a couple of orders for AFSIM and AFSIB which were not supposed to be affected. The orders hit as the shares dropped through the floor. I am down about $5000 so far. How come these orders were not blocked?

          1. I noticed some inconsistency between OTCMarkets website and some of the brokers. OTCMarkets listed No Info while brokers were still saying Current info. Of course tomorrow when its too late, they will have it updated.

        2. Nothing is impossible to get out of… I have sold all kinds of illiquid stuff for estates. The question is at what price for the asset and how much will the commission be?

    1. I snuck in a GTC bid through Ally yesterday on a low ball bird dogging effort. I noticed this evening they still have the order as open. So if it does trade, Im hoping it sneaks through if I can bag them.

    1. SIFMA statement on the exemption:

      SIFMA Statement On SEC No-Action Letter Regarding Amended Rule 15c2-11 In Relation To Fixed Income Securities

      SIFMA today issued the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, on the SEC No-Action Letter Regarding Amended Rule 15c2-11 in Relation to Fixed Income Securities:

      “SIFMA appreciates that the SEC has granted no-action relief on Rule 15c2-11 in relation to fixed income securities. Applying the Rule to fixed income securities when heretofore that has not been the case, and the rule has not been designed to be applied to them, would have had potentially significant negative effects on fixed income market participants including to its investors, market makers, and issuers. There are significant differences between trading in the equity and the fixed income markets. While we appreciate the relief, we continue to believe that for the Rule to be applied to fixed income securities it should be amended to reflect the differences between fixed income markets and OTC equity markets, and we believe that process will take additional time.”


      1. Great news for us. More trading opps and the ones I held on to may go up from here. People who bailed out for a loss are probably kicking themselves. How do you play the game when the rules keep changing?

        1. Martin, I wouldnt bust out the pom poms yet. They dont give a rip about baby bonds. FINRA gives them no respect and lists them as “equity linked notes”. I bet this ruling has zero to do with baby bonds as they trade on stock exchange. Which is frustrating as that is just the vehicle wrapper. A senior unsecured baby bond is just as legally binding as a $1000 senior unsecured bond on the bond exchange.

    2. Hmmm. Letter just says enforcement is delayed. This might mean that some brokers will enforce bonds and other will not. What a conundrum.

    3. There is a second “no enforcement” letter out from the SEC with respect to 15c2-11 and fixed income securities (which I have been reminded do *not* include the preferred shares / baby bonds type of fixed income securities that are most frequently discussed around here):


      Looks to be a phased implementation over three years, with the details in the link just above. Here’s a good summary / critique of the amended rule from the Cadwalader law firm. I liked this bit the best:

      “Rule 15c2-11 has been in existence for 50 years and never applied to debt securities. Applying a rule that was not intended for debt securities without any consideration of whether that is good policy is bad process. Delaying the application of the Rule, and “amending” the Rule by adding Annexes in a staff no-action letter, does not address the regulatory process issue or the public policy issue. If the SEC believes that it may be beneficial to apply Rule 15c2-11, or some variant thereof, to debt securities, it ought to propose a rule, take public comment, and consider that public comment before imposing new requirements. ”


  35. 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.

  36. 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.

            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.


                    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.


                      “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.


                      “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.

  37. 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.

  38. 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.

  39. “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.

              1. Thanks! I ended up selling all of my SLMNP. It’s very disappointing to get “protected” by the SEC like this where I’m forced out of positions.

              2. wow my AFFS shares just lost $3000. I did not realize they were going to be affected.
                I assume they will continue to pay the dividends?

    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.

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


    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).


        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.

  41. 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.

  42. 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.

  43. 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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