Article VII - Trading Halt and Delisting Rules
Article VII - Trading Halt and Delisting Rules
Section 1: Authority to Initiate Trading Halts
In circumstances in which CapEx deems it necessary to protect investors and the public interest, CapEx may halt trading of a listed company. Here are some examples of when trading for a listed company may be halted:
a. To permit the dissemination of vital and important material news affecting the company.
b. CapEx is requesting from the issuer information relating to material news, the issuer's ability to meet CapEx listing qualification requirements, or any other information which is necessary to protect investors and the public interest.
c. When extraordinary market activity in the security is occurring, such as the execution of a series of transactions for a significant Linden dollar value at prices substantially unrelated to the current market for the security.
d. When CapEx determines that extraordinary market activity is likely to have a material effect on the market for the security.
e. CapEx believes that extraordinary market activity is caused by the misuse or malfunction of an electronic quotation, communication, reporting, or execution system operated by, or linked to, CapEx.
f. A trading halt is requested by the company CEO.
g. “Breakers” that define how much a stock price can rise or fall in a given day that has been set by the company CEO has been triggered. Under this circumstance, trading will be resumed at the start of the new trading day, or earlier if requested by the company CEO. Breakers for each company will be set to 200% up and 50% down, unless requested differently by a company CEO. All requests for a modified Breaker setting will be posted in a News Story and in the Forums for that particular company.
Section 2: Disclosure of Material Information
It's required that, except in unusual circumstances CapEx issuers disclose promptly to the public any material information, which would reasonably be expected to affect the value of their securities or influence investors' decisions. CapEx issuers shall notify CapEx of the release of such material information that involves any of the events set forth below prior to its release to the public. CapEx recommends that CapEx issuers provide such notification at least two hours before such release.** Under unusual circumstances issuers may not be required to make public disclosure of material events; for example, where it is possible to maintain confidentiality of those events and immediate public disclosure would prejudice the ability of the company to pursue its corporate objectives. However, CapEx issuers remain obligated to disclose this information to CapEx upon request.
Whenever unusual market activity takes place in a CapEx issuer's securities, the issuer normally should determine whether there is material information or news which should be disclosed. If rumors or unusual market activity indicate that information on impending developments has become known to the investing public, or if information from a source other than the issuer becomes known to the investing public, a clear public announcement may be required as to the state of negotiations or development of issuer plans. Such an announcement may be required, even though the issuer may not have previously been advised of such information or the matter has not yet been presented to the issuer's Board of Directors for consideration. It may also be appropriate, in certain circumstances, to publicly deny false or inaccurate rumors which are likely to have, or have had, an effect on the trading in its securities or would likely have an influence on investment decisions.
** Notification may be provided by email to nyrounder@aol.com.
Section 3: Trading Halts
A) A trading halt benefits current and potential shareholders by halting all trading in any CapEx securities until there has been an opportunity for the information to be disseminated to the public. This decreases the possibility of some investors acting on information known to them but which is not known to others. A trading halt provides the public with an opportunity to evaluate the information and consider it in making investment decisions. It also alerts the marketplace to the fact that news has been released.
B) CapEx monitors trading in CapEx securities during the trading day for price and volume activity. In the event of certain price and volume movements, CapEx may contact an issuer and its market makers in order to ascertain the cause of the unusual market activity. CapEx treats the information provided by the issuer and other sources in a highly confidential manner, and uses it to assess market activity and assist in maintaining fair and orderly markets. CapEx listing includes an obligation to disclose to CapEx information that the issuer is not otherwise disclosing to the investing public or the financial community. On occasion, changes in market activity prior to the issuer's release of material information may indicate that the information has become known to the investing public. Changes in market activity also may occur when there is a release of material information by a source other than the issuer, such as when a CapEx issuer is subject to an unsolicited take-over bid by another company. Depending on the nature of the event and the issuer's views regarding the business advisability of disclosing the information, CapEx may work with the issuer to accomplish a timely release of the information. Furthermore, depending on the materiality of the information and the anticipated affect of the information on the price of the issuer's securities, CapEx may advise the issuer that a temporary trading halt is appropriate to allow for full dissemination of the information and to maintain an orderly market. The institution of a temporary trading halt pending the release of information is not a reflection on the value of the securities halted. Such trading halts are instituted, among other reasons, to insure that material information is fairly and adequately disseminated to the investing public and the marketplace, and to provide investors with the opportunity to evaluate the information in making investment decisions. A trading halt normally lasts one half hour but may last longer if a determination is made that news has not been adequately disseminated or that the original or an additional basis exists for continuing the trading halt.
C) CapEx is required to keep non-public information confidential and to use such information only for regulatory purposes.
D) Issuers are required to notify CapEx of the release of material information included in the following list of events prior to the release of such information to the public. It should also be noted that every development that might be reported to CapEx in these areas would not necessarily be deemed to warrant a trading halt. In addition to the following list of events, CapEx encourages issuers to avail themselves of the opportunity for advance notification to CapEx in situations where they believe, based upon their knowledge of the significance of the information, that a temporary trading halt may be necessary or appropriate.
a. Financial-related disclosures, including quarterly or yearly earnings, earnings restatements, pre-announcements or "guidance."
b. Corporate reorganizations and acquisitions, including mergers, tender offers, asset transactions and bankruptcies or receiverships.
c. New products or discoveries, or developments regarding customers or suppliers (e.g., significant developments in clinical or customer trials, and receipt or cancellation of a material contract or order).
d. Senior management changes of a material nature or a change in control.
e. Resignation or termination of independent auditors, or withdrawal of a previously issued audit report.
f. Events regarding the issuer's securities - e.g., defaults on senior securities, calls of securities for redemption, repurchase plans, stock splits or changes in dividends, changes to the rights of security holders, or public or private sales of additional securities.
g. Significant legal or regulatory developments.
E) Trading halts initiated upon request from the issuer shall last no more than 3 days or, under exceptional circumstances and after proper authorization from CapEx, 7 days, unless a longer period is deemed necessary by the CEO of Capital Exchange.
Section 4: Management Accounts Suspension
a. When a trading halt or a delisting occurs, accounts of the company CEO, directors, owner/s will be put on hold (frozen); at its sole discretion CapEx may lock additional accounts belonging to any known CEO/director, their known or identified alts and any account suspected of any wrongdoing. This is a measure intended to prevent company assets from being illegally taken away or transferred to third parties in order to hide the aforementioned assets.
For temporary halts, accounts will be reinstated (should no charge against the account be made) after (if needed) proper investigation from CapEx.
b. Exculpation from personal liability for monetary damages to the company/shareholders is not available for liability arising out of any of the following:
§ a breach of the duty of loyalty (such as the misappropriation of corporate opportunities or failing to disclose a conflict of interests)
§ acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law and/or Linden Lab Policies and Terms Of Service
§ improper payment of dividends or improper stock repurchases and redemptions
§ transactions from which the CEO/director derived an improper personal benefit
Section 5: Delistings
A delisting can occur when a company is no longer in compliance with the listing rules and/or the management fails to meet CapEx requirements and/or indications to reach compliance. A delisted company does still exist and the CEO/directors/managers keep their obligations and liabilities towards shareholders and third parties.
The CEO of Capital Exchange may in some circumtances remove the company from the Trading Page listing, while not officially delisting the company from Capital Exchange. This could be done in circumstances such as the CEO is not responding to correspondence properly or coming in-world often, not properly filing financials according to the rules, or other reasons deemed appropriate by the CEO of Capital Exchange. In essence, this action should be used when there is the belief that the company CEO will eventually return and abide by the rules of Capital Exchange.
A delistment means that the company is no longer allowed to be traded publicly on CapEx. To delist a company, there needs to be a majority vote to delist by the Capital Exchange Regulatory Commission (CERC). Trading halts and temporary removal of companies from the Trading Page do not need approval by the CERC. Only the approval of the CEO of Capital Exchange is required.