Section 929H – SIPC Reforms
SEC. 929H. SIPC REFORMS.
(a) Increasing the Cash Limit of Protection.--Section 9 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-3) is amended--
(1) in subsection (a)(1), by striking ``$100,000 for each such customer'' and inserting ``the standard maximum cash advance amount for each such customer, as determined in accordance with subsection (d)''; and
(2) by adding the following new subsections:
"(d) Standard Maximum Cash Advance Amount Defined.--For purposes of this section, the term `standard maximum cash advance amount' means $250,000, as such amount may be adjusted after December 31, 2010, as provided under subsection (e).
"(e) Inflation Adjustment.--
"(1) <<NOTE: Deadlines. Determination.>> In general.--Not later than January 1, 2011, and every 5 years thereafter, and subject to the approval of the Commission as provided under section 3(e)(2), the Board of Directors of SIPC shall determine whether an inflation adjustment to the standard maximum cash advance amount is appropriate. If the Board of Directors of SIPC determines such an adjustment is appropriate, then the standard maximum cash advance amount shall be an amount equal to--
"(A) $250,000 multiplied by--
"(B) the ratio of the annual value of the Personal Consumption Expenditures Chain-Type Price Index (or any successor index thereto), published by the Department of Commerce, for the calendar year preceding the year in which such determination is made, to the published annual value of such index for the calendar year preceding the year in which this subsection was enacted. The index values used in calculations under this paragraph shall be, as of the date of the calculation, the values most recently published by the Department of Commerce.
"(2) Rounding.--If the standard maximum cash advance amount determined under paragraph (1) for any period is not a multiple of $10,000, the amount so determined shall be rounded down to the nearest $10,000.
"(3) Publication and report to the congress.--Not later than April 5 of any calendar year in which a determination is required to be made under paragraph (1)--
"(A) <<NOTE: Federal Register, publication.>> the Commission shall publish in the Federal Register the standard maximum cash advance amount; and
"(B) the Board of Directors of SIPC shall submit a report to the Congress stating the standard maximum cash advance amount.
"(4) Implementation period.-- <<NOTE: Effective date.>> Any adjustment to the standard maximum cash advance amount shall take effect on January 1 of the year immediately succeeding the calendar year in which such adjustment is made.
"(5) Inflation adjustment considerations.--In making any determination under paragraph (1) to increase the standard maximum cash advance amount, the Board of Directors of SIPC
shall consider--
"(A) the overall state of the fund and the economic conditions affecting members of SIPC;
"(B) the potential problems affecting members of SIPC; and
"(C) such other factors as the Board of Directors of SIPC may determine appropriate.''.
(b) Liquidation of a Carrying Broker-dealer.--Section 5(a)(3) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78eee(a)(3)) is amended--
(1) by striking the undesignated matter immediately following subparagraph (B);
(2) in subparagraph (A), by striking "any member of SIPC'' and inserting ``the member'';
(3) in subparagraph (B), by striking the comma at the end and inserting a period;
(4) by striking ``If SIPC'' and inserting the following:
"(A) In general.--SIPC may, upon notice to a member of SIPC, file an application for a protective decree with any court of competent jurisdiction specified in section 21(e) or 27 of the Securities Exchange Act of 1934, except that no such application shall be filed with respect to a member, the only customers of which are persons whose claims could not be satisfied by SIPC advances pursuant to section 9, if SIPC''; and
(5) by adding at the end the following:
"(B) Consent required.--No member of SIPC that has a customer may enter into an insolvency, receivership, or bankruptcy proceeding, under Federal or State law, without the specific consent of SIPC, except as provided in title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act.''.