What is a Chill
A chill is when the Depository Trust Company (DTC) places one or more restrictions on transactions regarding a given security. A chill can be placed when there is a problem or issue with the security, the security's issuer or the security's transfer agent. Chill restrictions are intended to limit the potential for problems within the financial marketplace, and can be placed on a security for various reasons.
BREAKING DOWN Chill
A chill occurs when the Depository Trust Company limits the types of transactions that can be performed regarding a security. Owned by many financial companies including the New York Stock Exchange (NYSE), the Depository Trust Company acts as a clearinghouse for stock exchange securities, settling trades in corporate and municipal securities. If the Depository Trust Company has cause to be concerned about a specific security currently processed through its system, it may place a "chill" status on the security. This will restrict brokerages' ability to transfer the shares or units of the security through Depository Trust Company until the security's issues are cleared up or it ceases trading on the market.