TD Ameritrade OTC Restrictions Deadline News (August 13, September 3 and 28, 2021)

by OTC Financial | Last Updated: 8 months ago
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TD Ameritrade has announced some restrictions on OTC penny stock trading that some investors recently may have found confusing. Non-current OTC penny stocks (Red Stop Sign) as of August 13, 2021, potentially risk untradeable past the deadline.

This applies to penny stocks traded from the US OTC Markets Group exchange. The panic and confusion described by some investors online have caused panic selling of different individual penny stocks leading up to this date.

The good news is that TD Ameritrade has confirmed that they have moved the August 13, 2021 restriction date for non-current penny stocks too late August or early September of 2021.

As Charles Schwab has completed its acquisition of the TD Ameritrade discount brokerage, it has been unclear to some individuals why Charles Schwab did not have the August 13 OTC restriction date – but many TD Ameritrade users reported they did.

As you can see from the tweet below on social media by investors to @TDAmeritrade Twitter account addressing this concern in question.

td ameritrade otc stocks restriction deadline 1

Ideally, much of the confusion could have been avoided if the TD August 13 restriction deadline was instead aligned with the original SEC announced final deadline of September 28, 2021.

Additional information on Rule 15c2-11 and how it has impacted investors is further discussed on the OTC Markets Group website

TD Ameritrade Will Only Accept Orders To Liquidate Positions After September 3, 2021 For Non-Current OTC Stocks

  • No new buy orders accepted starting on or after September 3, 2021 for Non-Current OTC Stocks

Over-The-Counter (OTC) Stocks can be purchased on TD Ameritrade and other brokers such as E-Trade until September 3, 2021. OTC Securities that have not filed to become Pink Current may be given the Red Stop-Sign on the OTC Market Group website and trading restricted.

Anyone who has purchased these stocks before September 3 can maintain their shares and wait for companies to become Pink Current. During this time, you will only execute sell orders to close positions.

You will not be able to buy and open any new non-Pink-Current OTC Penny Stocks after this date.

TD Ameritrade SEC Rule 15c 211 September28
  • TD Ameritrade List Of TD Ameritrade SEC Rule 15c2-11 Restricted Securities

For the complete list and details, please check the following TD Ameritrade website link below:

https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA101550.pdf

Non-Current OTC Stocks Become Delisted Caveat Emptor Securities

What happens to non-current OTC penny stocks? Suppose a company fails to comply with OTC Pink Sheets reporting requirements. In that case, it will be shifted to the lower-tier market, also known as the “Gray Market,” whereby investors will have limited or no ability at all to trade shares.

You may have seen a recent news story about how companies that are not compliant with current OTC Pink Sheets regulations will be shifted to the “Gray Market.” This is a significant development for investors and traders who want to know if their investments are being made in a company that does not correctly adhere to required disclosure standards.  

Companies that do not operate transparently are often associated with other bad behavior. Companies need to be willing to share information about their operations and finances to comply with OTC Market Group Pink Sheet regulations so investors can make better-informed investment decisions.

As an SEC registered broker-dealer, TD Ameritrade is required to follow federal regulations

The Securities and Exchange Commission (SEC) is stepping in to protect investors currently trading otc stocks securities on the OTC Penny Stock Markets. Many of these funds are being bought and sold by retail investors, which is largely why this problem has been so prevalent.

The SEC states that many issuers of quoted OTC securities publicly disclose information; however, some do not provide timely public information. With the lack of current and shared information about these issuers, retail investors will be at a disadvantage when trading them because they have no way to know what they’re investing in.

Therefore, this issue is being addressed by eliminating displayed quotes by the broker-dealers on the affected securities that companies do not meet Pink Current reporting requirements.

TD Ameritrade Deadline For Non-Current OTC Stocks

There are key dates that relate to the original problem confusing in the first place. The SEC and OTC Markets Group have required companies to provide all required updated disclosures to maintain OTC Pink Sheets status no later than June 30, 2021.

Should an OTC traded company be found not in compliance with the rules after September 28, 2021, the OTC stock ticker symbol will be transferred from the Pink Sheets/Current Market to the lower tier Gray Market.

TD Ameritrade SEC Rules 15c 211 September28

TD Ameritrade List Of Impacted OTC Penny Stocks

TD Ameritrade has released a list of penny stocks that have been impacted. The list is dynamic and constantly being updated. It includes, as stated, “…companies that have not made required current financial and company information available to regulators and investors.” The list is subject to change at any time.

This move may be an effort by TD Ameritrade to protect its customers from investing in non-reporting and up-to-date companies.

  • TD Ameritrade List Of TD Ameritrade SEC Rule 15c2-11 Restricted Securities

For the complete list and details, please check the following TD Ameritrade website link below:

https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA101550.pdf

OTC Markets Rule Changes – Additional Topic Investor Information

OTC Markets Group Information On Rule 15c2-11

The SEC recently made amendments to Rule 15c2-11, which will effect on September 28, 2021, and these changes will impact companies and their market designations. OTC Markets Group hosted a webinar to discuss further some of these changes where you can learn about these upcoming amendments and frequently asked questions here.

What Rule 2-11 Change Means For OTCQX or OTCQB Companies

Key Takeaways

We will continue to update this post on the TD Ameritrade OTC Restrictions Deadline News (August 13 and September 3) with new information as it becomes available. For now, we hope you found the article informative and helpful in understanding how these changes affect your making decisions about your investments online. Please let us know what additional questions you may have to help with.

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