Tag Archives: trading suspension

What are Unsolicited Quotations in OTC Stock?

Unsolicited Quotations are bid and ask quotes that market makers post to reflect unsolicited orders by their customers.

Do Brokers Accept Deposits of Stock With Only Unsolicited Quotations?

Yes. Many OTC brokers which specialize in over-the-counter penny stocks trading on the OTC Markets or OTC Bulletin Board will readily assist customers with deposits of stock even when the only quotations are unsolicited.  This is especially true if the OTC Issuer is an SEC reporting company and current in its filings.

Why Would a Stock Only Have Unsolicited Quotations?

Sometimes OTC companies are subject to FINRA or SEC trading suspensions for unexplained volume caused by spam.  At other times, many companies from the same industry are subject to increased scrutiny and several of them will have their trading suspended while FINRA or the SEC investigates allegations of wrongoing.

After a Caveat Emptor Label Many Companies May Lose Market Makers

Many of those companies are able to clear themselves of any wrongdoing, and remove the Caveat Emptor or Skull and Crossbones label, and they are subsequently cleared to trade again, but at first, no market makers remain willing to take the risk.

These OTC Issuers may once have had a robust trading volume with many well known market makers, but following a Caveat Emptor designation they might temporarily remain without a market maker to file a new Form 211 to comply with SEC Rule 15c2-11.  This could happen after a trading suspension, which lasts more than 10 days, for example.  At that point, only unsolicited quotations would be shown.

How are Unsolicited Quotations Published for Penny Stocks?

A customer will call his broker asking to buy or sell a particular OTC stock.  The broker then posts a quotation demonstrating the brokerage customer’s interest in the stock, which was not solicited by the brokerage. These quotations are marked as “unsolicited” quotations on OTCMarkets.com or on the OTC Bulletin Board.

OTC Markets Securities Lawyer for Shareholders and Issuers

Shareholders and Management of OTC Markets or OTC Bulletin Board companies can contact OTC Markets lawyer Matt Stout at (410) 429-7076 or mstout@otclawyers.com with questions regarding trading suspensions, complying with SEC Rule 15c2-11, or clearing restricted stock.

 

What is a Trading Halt?

In contrast to an SEC trading suspension, which lasts for 10 days over a public interest concern, a trading halt is used by is used by securities exchanges like the New York Stock Exchange (NYSE) and the NASDAQ, and usually lasts less than an hour.

Reasons for a Trading Halt

A trading halt can be called at any time during the trading day

  1. So a public company can release important news which is likely to have a huge effect, either positive or negative, on the stock’s volume; or
  2. When there is a major imbalance in orders between buyers and sellers in a stock.

What is a Trading Delay?

A trading halt is also called a trading delay.   The term “delayed opening” is used when a securities exchange halts trading at the start of the trading day.

Types of Trading Halts and Delays

There are two different kinds of trading halts and delays.

  1. Regulatory, usually when a public company has pending news that the exchange believes will cause a volume spike.   This allows market participants time to assess the impact of the news release.
  2. Non-regulatory, usually when there is a question about whether the security continues to meet the exchanges listing requirements or when there is a significant order imbalance.