Companies that use such third-party valuations for thinly traded securities
, known as tier two assets, "can't simply take the numbers as gospel," Jason Plourde, a professional accounting fellow in the SEC's office of the chief accountant, told an American Institute of CPAs meeting in December.
For thinly traded securities
, trading costs are almost invariant with respect to trade size, and spread-related payments account for their largest fraction.
Investors also have learned the risk inherent in pricing products off thinly traded securities
BDCs invest in private companies and thinly traded securities
of public companies, including the debt instruments of such companies, making them potentially susceptible to issues arising out of bankruptcies or defaults.
Because the "down payment" supposedly values the thinly traded securities
at a premium, the deal appears attractive to the victim.
Gutstein's background and experience in the capital markets especially as they pertain to the marketing of small, thinly traded securities
may help the company achieve increased visibility in the investment community that ultimately may further narrow the value gap.
Taxation of unrealized income would further inhibit market making activities because the market value of thinly traded securities
held in inventory may be illusory, and it may be difficult for these dealers to liquidate sufficient positions in the securities to pay the tax.
FINRA found that in each instance, the firms' customers deposited large blocks of thinly traded securities
in certificate form and then immediately liquidated those positions.
FT Interactive Data's recently announced business entity data service, its EUSD data - as well as its evaluations for thinly traded securities
, high quality reference data and ISO 15022 formatted corporate actions data - can all help firms address risk management issues.
This forum will bring together a distinguished group of investment managers, independent auditors and academics to examine the critical issue of determining the fair value of international and thinly traded securities
By benchmarking thinly traded securities
against indicators of current market value, a mutual fund can be far more assured that its end-of-day NAV calculation will appropriately take into account fair value requirements for individual securities.