Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

Securities Investor Protection Corporation, or SIPC, has filed with the SEC a proposed bylaw change.  The SEC has published a notice to solicit comments on the proposed bylaw change from interested persons.

Section 4(c)(2) of the Securities Investor Protection Act of 1970, or SIPA, requires SIPC to impose assessments upon its member broker-dealers deemed necessary and appropriate to establish and maintain a broker-dealer liquidation fund administered by SIPC and to repay any borrowings by SIPC used to liquidate a broker-dealer.  Pursuant to this authority, SIPC collects an annual assessment from its members.  The amount of the annual assessment is prescribed by SIPA and the SIPC bylaws.  

 The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended SIPA to change the minimum assessment from an amount not to exceed $150 to an amount not to exceed 0.02 percent of the gross revenues from the securities business of the SIPC member.  Under Article 6 of the SIPC bylaws, SIPC must assess its members a minimum amount ($150) unless certain conditions apply. Because in some cases an assessment of $150 would exceed 0.02 percent of the gross revenues, the SIPC assessment bylaw must be amended to be consistent with the Dodd-Frank Act.

 Check frequently for updates on the Dodd-Frank Act and other important securities law matters.