Thread by @live2beingu

#AMC #GME #TSLA #KOSS #NAKD #SNDL #NOK #BB #BBBY #CALLINGALLMEMES #MOON #SEATBELTS #HOLDERS #STONKS #STOCKS #SLAPTHEASK If you could here me singing right now you would hear the words “TIME TO COME ON HOME, COME ON HOME, COME ON HOME! IT’S TIME TO COME HOME.” Lets get this

message out far and wide folks. Tonights recap message it’s time to come on home. Why? We got some official things to discuss and I may be late to the party but I’m about to break down the SR-DTC-2021-005. Why am I saying it’s time to come on home?

Because this all affects us the same way we are one family in this struggle. No matter what happens we got each others backs just like family. So lets break this rule down and I’ll tell you how it effects you and why this matters. Lets Recap what we know and what has occurred in

terms of regulation:

1.March 5, 2021 The National Security Clearing Corporation amended Section 806(e)(1). This rule deals with the Supplementary Liquid Deposits. Basically the NSCC is worried that the HF and MM will default on the stock. They are trying to collect enough

money to mitigate their risk of a potential squeeze on the market right before any squeeze happens. Why? The NSCC will look at the volatility of the market on that specific trading day estimates how much the price will go up even on days of short ladder attacks and ask the

HF to deposit the difference between the current market price and the volatility amount. The NSCC basically told folks “I’m going to need my money today; I’m not waiting for the end of the month. Through rain sleet, or snow you better have my money at the volatile price and not

the short interest crap ya’ll be pulling on the day traders. When I call have my check, ach, EFT, major credit card, money order, money gram, lending institutions ready so I can withdraw funds at a moments notice. You have two days. Lol!

2.March 23, 2021 The NSCC goes about changing the rules to get ready for what is to come. We have a liquidity problem. Per section 7 of the plan, it states Liquidity shortfalls “Section 5.3 (Liquidity Shortfalls) of the plan identifies tools that may be used to address the

foreseeable shortfalls of the NSCC’s liquidity resources following a member default.” Homie say what now… The NSCC and is trying to hedge against a known and foreseeable short squeeze. Then in section 5.2.4 (Recover Corridor and Recovery Phase) Outlines the early warning

indicators to be used to evaluate its options and potentially prepare to enter the recovery phase, to be taken by the NSCC to restore its financial resources and avoid a wind down of its business.

These were the two former rules we had till two days ago and then our old family kinfolk lol came knocking with Rule SR-DTC-2021-005. So, what is this rule really about let’s take a look at it together. So, the New rule is said to “Modify the DTC Settlement Service Guide and the

Form of DTC Pledgee’s Agreement. Specifically it would revise the text in Settlement Guide and Pledgee’s Agreement to clarify the text with respect to the processing of book entries of Pledge-related activity at DTC. Okay and? Why does this apply to me or why should

I pay attention?

Well, here we go let’s talk terms:

1.Pledge: A pledge is a bailment that conveys possessory title to property owned by a debtor to a creditor to secure repayment for some debt or obligation.
2.Pledgor: means a person who deposits something as a security

contract or the payment of a debt (Debtor)
3.Pledgee: means a person to whom the title is being given to secure repayment for some debt or obligation. (Creditor)
4.Securities Account Owner: A person doesn’t not own a direct interest in the security and only has an indirect

interest in the security by having a security entitlement in that account. The purpose of the account is that it is held internally by the DTC.
5. Security Entitlement Owner: Entitles the entitlement holder to rights against the securities intermediary and interest

prop. if held by the securities intermediary. 6. Security Owner: gives the person holding the security direct interest in the security.
So, let’s tie the concept together using language from the rule first “Pledgor creates a security interest in a security, that is held either

in a Securities Account or a Securities Entitlement in accordance with the NYUCC.” In plain english….When a debtor uses its bank account at the DTC to put up a stock as collateral it creates a security interest. The interest is indirect and allows the entitlement holder

certain rights against the DTC and the Security owner.
The above is just explaining the concept of the transaction. Now that we all understand it lets go further. So why are we talking about this. I’ll get there patience lol. Here is the old rule and why it’s changing:

“When we talk about the transfer of the security to an account of a pledgee, what the pledgee receives is not a security entitlement. The securities remain credited to the pledgor’s account until the pledgee releases the pledged securities or makes a demand for the pledged

security. Why? Because it’s a movement in the position from one account to another. In the reverse the release of the pledged position would transfer the pledge back to the general free account. Right so it’s tracking the movement from one stock account to another. Fine.

However, in reality the DTC only places a notation on the account of the pledgor that the securities are pledge to the pledgee and the securities remain in pledged status until the pledgee instructs otherwise. So, there is no real Security actually being held by the creditor,

and what is actually being held is not a security entitlement. The key to remember in all of this is that a Creditor can only exercise its control because it has the right to order fort he deliver, pledge release or withdrawal of a security. Why? Because the definition of

an Entitlement Order “is that it is the instruction from a participant or pledgee to the corporation with respect to a Delivery, Pledge, Release, or Withdrawal of a security credited to Securities Account is an Entitlement Order. The order need not be credited to the Securities

account of the Pledgee.” This is important as it allows the creditor aka the banks that have been used to leverage these stocks to call the bluff and margin call HF and MM. The DTC must comply with the order as set forth in the rules.

Okay KT get to the point.

What is the central focus of all three rules? The NSCC and the DTC do not want to get caught being the bag holders. They have now made the rules to indicate three things. Part 2 on the the way. This is not even close to being done. enjoy the opening credits...

@ThreadReaderApp unroll