DTC Chills & Freezes
Call Our DTC Attorneys Now at 888-978-9901
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
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
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!