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Looking at United Development FUnding Income Fund IV (which was a listed REIT on Nasdaq which subsequently traded OTC):

Q1 - What happens after a security registration is revoked by SEC? (I was surprised that, there can be cash distributions for a security which has its registration revoked.)

Q2 - Separately: SEC says Broker-dealers may not execute any trades in stocks whose registration has been revoked pursuant to Section 12(j). I guess this means existing shareholders can still trade with counterparties other than broker-dealers?)

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    Related SEC webpage: Defunct Company, Stock Continues to Trade
    – Flux
    Sep 4 at 5:29
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    "I was surprised that, there can be cash distributions for a security which has its registration revoked" — When a company's stock has its registration revoked, the company effectively becomes a private company. Private companies can also pay dividends.
    – Flux
    Sep 4 at 5:32
  • @Flux Please answer questions in an answer, not in a comment. Sep 4 at 15:14
  • @OrangeCoast-reinstateMonica That does not answer the question. It is a comment on the OP's side note.
    – Flux
    Sep 4 at 15:25
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Q1. Based on this article "Once registration has been revoked, the stock’s ticker will be deleted. Shareholders will still be shareholders but in a private company. Their stock will be extremely illiquid, and its value will be difficult to determine, as there is no public market for it."

Q2. Correct, broker-dealers may not execute any trades resulting in the stock to be very illiquid and the chances that broker-dealers execute stocks of those kinds are 50/50 chance.

There are changes though taking effect on the OTC markets coming September 28th. More information here

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