...On the MM issue, there has to be a way for other MM's to come in and trade it, isn't there? Can't they go in under the original 15c-2-11?
For some reason, the full notice of the shopping.com suspension has not yet appeared at the SEC web site. These notices typically carry a paragraph concerning the conditions under which brokers and dealers can enter quotes for the stock in question. For example, here is the paragraph from the suspension of Rocky Mountain International Ltd.:
<<Further, brokers and dealers should be alert to the fact that,
pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the
trading suspension, no quotation may be entered unless and until they have
strictly complied with all of the provisions of the rule. If any broker of
dealer has any questions as to whether or not he has complied with the
rule, he should not enter any quotation but immediately contact the staff
of the Securities and Exchange Commission in Washington, D.C. If any
broker or dealer is uncertain as to what is required by Rule 15c2-11, he
should refrain from entering quotations relating to RMIL s securities until
such time as he has familiarized himself with the rule and is certain that
all of its provisions have been met. If any broker or dealer enters any
quotation which is in violation of the rule, the Commission will consider
the need for prompt enforcement action.>>
sec.gov
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My understanding of the above paragraph is that market makers can't make a market for the stock unless they have reasonable assurance that the company's financials reflect the current situation concerning the stock in question. Accordingly there has to be a new filing. If one market maker files under 15c2-11 and their application is accepted by NASD then others can currently piggy-back on their application a month later. However, this often a tough hurdle for a halted company to achieve. As a result, as noted in an Orange County Register article cited in an earlier post, many stocks never trade again after a suspension.
See: ocregister.com
However, recently, a number of stocks (for example IHIN and EOSC) appear to have traded post-halt without the benefit of market makers. I believe they are trading through Instinet, ECNs and/or internal brokerage matching of retail customer buy and sell orders without benefit of market makers. Unfortunately this often leads to a very volatile market due to the often large 'spreads' between customers' bid and ask prices. For example the price range of IHIN today was $13.50 to $18.00 on only 23,000 shares traded. Further details on IHIN trading soon after the end of the trading suspension can be found in:
news-observer.com
news-observer.com |
