DTC Chills & Freezes

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The Depository Trust Company has set specific criteria for an issuer to establish an active market in its stock. Get in touch with experienced DTC attorney for in-depth guidance and help for ensuring that your securities become DTC eligible, instead of having their services limited or terminated.

When The Depository Trust Company (DTC) places a chill or freeze on your DTC services, this can be a rough blow to the operation of your company or business. The DTC is one of the largest securities depositories in the world. It processes and settles trades in corporate securities, as well as municipal securities. It also keeps records of securities balances.

Not only will a chill or freeze disrupt important deposit and transfer activity related to your securities, but it will also provide public notification of the negative action, which could serve as a red flag for investors. If you are having trouble with a DTC chill or freeze, you should immediately consult with a securities compliance attorney from our full-service law firm, Securities Compliance Group. We can help you work through the issue as quickly and effectively as possible so that you can potentially speed up the process of getting your negative DTC action removed!

How do chills and freezes work?

According to the U.S. Securities and Exchange Commission, a chill is a more limited restriction, as it places limitations only on certain DTC services. For example, limitations might be placed specifically on a DTC participant's deposit or withdrawal services. A freeze, on the other hand, suspends all services provided by the DTC. For both chills and freezes, the restriction period can last just a few days, or it can last for a much longer time period. When the problem that led to the freeze does not get resolved, the affected security or securities will likely be removed from the DTC.

What can cause a chill or freeze?

There are a number of different issues that can lead to a chill or a freeze. These range from more simple problems with a company or its securities to more complex issues that involve possible violations of the law. An example of a simpler problem might be corporate reorganization, the DTC participant's loss of a transfer agent or a failure to follow certain DTC rules. A more complex problem may be the DTC being alerted that certain security issuances or transfers are in violation of federal law, state law or regulations.

Contact Securities Law Group now!

Our legal team at Securities Compliance Group is headed by General Counsel and Managing Partner Adam S. Tracy. Mr. Tracy is a competent lawyer and capital markets consultant who is well-versed in all aspects of securities law. He also handles matters related to corporate finance, corporate law, IPO issues and much more. Contact our firm so we can provide you with the legal guidance that is needed to address your DTC chill or freeze!

Securities Compliance Group Securities Compliance Group, LTD Adam S. Tracy, founder of the Securities Compliance Group, is an experienced corporate & securities attorney that handles initial public offerings, reverse mergers, securities offerings, compliance and private placement memorandums. Securities Compliance Group was founded in 2005 by Adam S. Tracy, an experienced attorney and capital markets consultant. A former competitive rugby player and serial entrepreneur, Adam Tracy has a wealth of experience on both sides of the table. He has advised many companies with regards to legal, compliance and capital markets matters. Corporate Lawyer 2005-05-05 Adam S. Tracy https://www.ibankattorneys.com/images/Logo.png
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