15 U.S.C. § 78ccc — Securities Investor Protection Corpora-

Page 477 TITLE 15—COMMERCE AND TRADE § 78ccc 1 See References in Text note below. (B) disclosing the action, if any, the Com- mission intends to take with respect to the finding or recommendation. (h) Federal Advisory Committee Act The Federal Advisory Committee Act (5 U.S.C. App.) 1 shall not apply with respect to the Com- mittee and its activities. (June 6, 1934, ch. 404, title I, § 40, as added Pub. L. 114–284, § 2(b), Dec. 16, 2016, 130 Stat. 1450.) Editorial Notes REFERENCES IN TEXT The Federal Advisory Committee Act, referred to in subsec. (h), is Pub. L. 92–463, Oct. 6, 1972, 86 Stat. 770, which was set out in the Appendix to Title 5, Govern- ment Organization and Employees, and was substan- tially repealed and restated in chapter 10 (§ 1001 et seq.) of Title 5 by Pub. L. 117–286, §§ 3(a), 7, Dec. 27, 2022, 136 Stat. 4197, 4361. For disposition of sections of the Act into chapter 10 of Title 5, see Disposition Table pre- ceding section 101 of Title 5. § 78rr. Data standards for security-based swap reporting (a) Requirement The Commission shall, by rule, adopt data standards for all reports related to security- based swaps that are required under this chap- ter. (b) Consistency The data standards required under subsection (a) shall incorporate, and ensure compatibility with (to the extent feasible), all applicable data standards established in the rules promulgated under section 5334 of title 12, including, to the extent practicable, by having the characteristics described in clauses (i) through (vi) of sub- section (c)(1)(B) of such section 5334. (June 6, 1934, ch. 404, title I, § 41, as added Pub. L. 117–263, div. E, title LVIII, § 5821(h), Dec. 23, 2022, 136 Stat. 3427.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a), was in the original ‘‘this Act’’. See References in Text note set out under section 78a of this title. CODIFICATION Pub. L. 117–263, which directed amendment of the Se- curities Exchange Act of 1934 by adding this section at the end, is reflected in the source credit above as add- ing this section to title I of the Securities Exchange Act of 1934, to reflect the probable intent of Congress. Statutory Notes and Related Subsidiaries RULE OF CONSTRUCTION—NO NEW DISCLOSURE REQUIREMENTS Enactment of section not to be construed to require certain additional information to be collected or dis- closed, see section 5826 of Pub. L. 117–263, set out as a note under section 77g of this title. CHAPTER 2B–1—SECURITIES INVESTOR PROTECTION Sec. 78aaa. Short title. Sec. 78bbb. Application of Securities Exchange Act of 1934. 78ccc. Securities Investor Protection Corporation. 78ddd. SIPC Fund. 78eee. Protection of customers. 78fff. General provisions of a liquidation pro- ceeding. 78fff–1. Powers and duties of a trustee. 78fff–2. Special provisions of a liquidation pro- ceeding. 78fff–3. SIPC advances. 78fff–4. Direct payment procedure. 78ggg. SEC functions. 78hhh. Examining authority functions. 78iii. Functions of self-regulatory organizations. 78jjj. Prohibited acts. 78kkk. Miscellaneous provisions. 78lll. Definitions. § 78aaa. Short title This chapter may be cited as the ‘‘Securities Investor Protection Act of 1970’’. (Pub. L. 91–598, § 1(a), Dec. 30, 1970, 84 Stat. 1636.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘This Act’’, meaning Pub. L. 91–598, Dec. 30, 1970, 84 Stat. 1636. For complete classification of this Act to the Code, see Tables. Statutory Notes and Related Subsidiaries SHORT TITLE OF 1978 AMENDMENT Pub. L. 95–283, § 1, May 21, 1978, 92 Stat. 249, provided that: ‘‘This Act [enacting sections 78fff–1 to 78fff–4 of this title, amending sections 77c, 78c, 78k, and 78ccc to 78lll of this title and enacting provisions set out as a note under section 78k of this title] may be cited as the ‘Securities Investor Protection Act Amendments of 1978’.’’ § 78bbb. Application of Securities Exchange Act of 1934 Except as otherwise provided in this chapter, the provisions of the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] (hereinafter referred to as the ‘‘1934 Act’’) apply as if this chapter constituted an amendment to, and was included as a section of, such Act. (Pub. L. 91–598, § 2, Dec. 30, 1970, 84 Stat. 1637.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘this Act’’, meaning Pub. L. 91–598, Dec. 30, 1970, 84 Stat. 1636. For complete classification of this Act to the Code, see Tables. The Securities Exchange Act of 1934, referred to in text, is act June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of this title. For complete classification of this Act to the Code, see section 78a of this title and Tables. § 78ccc. Securities Investor Protection Corpora- tion (a) Creation and membership (1) Creation There is hereby established a body corporate to be known as the ‘‘Securities Investor Pro- Page 478 TITLE 15—COMMERCE AND TRADE § 78ccc tection Corporation’’ (hereafter in this chap- ter referred to as ‘‘SIPC’’). SIPC shall be a nonprofit corporation and shall have succes- sion until dissolved by Act of the Congress. SIPC shall— (A) not be an agency or establishment of the United States Government; and (B) except as otherwise provided in this chapter, be subject to, and have all the pow- ers conferred upon a nonprofit corporation by, the District of Columbia Nonprofit Cor- poration Act. (2) Membership (A) Members of SIPC SIPC shall be a membership corporation the members of which shall be all persons registered as brokers or dealers under sec- tion 78o(b) of this title, other than— (i) persons whose principal business, in the determination of SIPC, taking into ac- count business of affiliated entities, is con- ducted outside the United States and its territories and possessions; (ii) persons whose business as a broker or dealer consists exclusively of (I) the dis- tribution of shares of registered open end investment companies or unit investment trusts, (II) the sale of variable annuities, (III) the business of insurance, or (IV) the business of rendering investment advisory services to one or more registered invest- ment companies or insurance company separate accounts; and (iii) persons who are registered as a broker or dealer pursuant to section 78o(b)(11)(A) of this title. (B) Commission review SIPC shall file with the Commission a copy of any determination made pursuant to subparagraph (A)(i). Within thirty days after the date of such filing, or within such longer period as the Commission may designate of not more than ninety days after such date if it finds such longer period to be appropriate and publishes its reasons for so finding, the Commission shall, consistent with the public interest and the purposes of this chapter, af- firm, reverse, or amend any such determina- tion of SIPC. (C) Additional members SIPC shall provide by rule that persons ex- cluded from membership in SIPC under sub- paragraph (A)(i) may become members of SIPC under such conditions and upon such terms as SIPC shall require by rule, taking into account such matters as the avail- ability of assets and the ability to conduct a liquidation if necessary. (D) Disclosure Any broker or dealer excluded from mem- bership in SIPC under subparagraph (A)(i) shall, as required by the Commission by rule, make disclosures of its exclusion and other relevant information to the customers of such broker or dealer who are living in the United States or its territories and pos- sessions. (b) Powers In addition to the powers granted to SIPC elsewhere in this chapter, SIPC shall have the power— (1) to sue and be sued, complain and defend, in its corporate name and through its own counsel, in any State, Federal, or other court; (2) to adopt, alter, and use a corporate seal, which shall be judicially noticed; (3) to adopt, amend, and repeal, by its Board of Directors, such bylaws as may be necessary or appropriate to carry out the purposes of this chapter, including bylaws relating to— (A) the conduct of its business; and (B) the indemnity of its directors, officers, and employees (including any such person acting as trustee or otherwise in connection with a liquidation proceeding) for liabilities and expenses actually and reasonably in- curred by any such person in connection with the defense or settlement of an action or suit if such person acted in good faith and in a manner reasonably believed to be con- sistent with the purposes of this chapter. (4) to adopt, amend, and repeal, by its Board of Directors, such rules as may be necessary or appropriate to carry out the purposes of this chapter, including rules relating to— (A) the definition of terms used in this chapter, other than those terms for which a definition is provided in section 78lll of this title; (B) the procedures for the liquidation of members and direct payment procedures, in- cluding the transfer of customer accounts, the distribution of customer property, and the advance and payment of SIPC funds; and (C) the exercise of all other rights and powers granted to it by this chapter; (5) to conduct its business (including the carrying on of operations and the maintenance of offices) and to exercise all other rights and powers granted to it by this chapter in any State or other jurisdiction without regard to any qualification, licensing, or other statute in such State or other jurisdiction; (6) to lease, purchase, accept gifts or dona- tions of or otherwise acquire, to own, hold, im- prove, use, or otherwise deal in or with, and to sell, convey, mortgage, pledge, lease, exchange or otherwise dispose of, any property, real, personal or mixed, or any interest therein, wherever situated; (7) subject to the provisions of subsection (c), to elect or appoint such officers, attor- neys, employees, and agents as may be re- quired, to determine their qualifications, to define their duties, to fix their salaries, re- quire bonds for them and fix the penalty thereof; (8) to enter into contracts, to execute instru- ments, to incur liabilities, and to do any and all other acts and things as may be necessary or incidental to the conduct of its business and the exercise of all other rights and powers granted to SIPC by this chapter; and (9) by bylaw, to establish its fiscal year. (c) Board of Directors (1) Functions SIPC shall have a Board of Directors which, subject to the provisions of this chapter, shall Page 479 TITLE 15—COMMERCE AND TRADE § 78ccc determine the policies which shall govern the operations of SIPC. (2) Number and appointment The Board of Directors shall consist of seven persons as follows: (A) One director shall be appointed by the Secretary of the Treasury from among the officers and employees of the Department of the Treasury. (B) One director shall be appointed by the Federal Reserve Board from among the offi- cers and employees of the Federal Reserve Board. (C) Five directors shall be appointed by the President, by and with the advice and consent of the Senate, as follows— (i) three such directors shall be selected from among persons who are associated with, and representative of different as- pects of, the securities industry, not all of whom shall be from the same geographical area of the United States, and (ii) two such directors shall be selected from the general public from among per- sons who are not associated with a broker or dealer or associated with a member of a national securities exchange, within the meaning of section 78c(a)(18) or section 78c(a)(21), respectively, of this title, or similarly associated with any self-regu- latory organization or other securities in- dustry group, and who have not had any such association during the two years pre- ceding appointment. (3) Chairman and Vice Chairman The President shall designate a Chairman and Vice Chairman from among those direc- tors appointed under paragraph (2)(C)(ii) of this subsection. (4) Terms (A) Except as provided in subparagraphs (B) and (C), each director shall be appointed for a term of three years. (B) Of the directors first appointed under paragraph (2)— (i) two shall hold office for a term expir- ing on December 31, 1971, (ii) two shall hold office for a term expir- ing on December 31, 1972, and (iii) three shall hold office for a term ex- piring on December 31, 1973, as designated by the President at the time they take office. Such designation shall be made in a manner which will assure that no two persons appointed under the authority of the same clause of paragraph (2)(C) shall have terms which expire simultaneously. (C) A vacancy in the Board shall be filled in the same manner as the original appoint- ment was made. Any director appointed to fill a vacancy occurring prior to the expira- tion of the term for which his predecessor was appointed shall be appointed only for the remainder of such term. A director may serve after the expiration of his term until his successor has taken office. (5) Compensation All matters relating to compensation of di- rectors shall be as provided in the bylaws of SIPC. (d) Meetings of Board The Board of Directors shall meet at the call of its Chairman, or as otherwise provided by the bylaws of SIPC. (e) Bylaws and rules (1) Proposed bylaw changes The Board of Directors of SIPC shall file with the Commission a copy of any proposed bylaw or any proposed amendment to or repeal of any bylaw of SIPC (hereinafter in this para- graph collectively referred to as a ‘‘proposed bylaw change’’), accompanied by a concise general statement of the basis and purpose of such proposed bylaw change. Each such pro- posed bylaw change shall take effect thirty days after the date of the filing of a copy thereof with the Commission, or upon such later date as SIPC may designate or such ear- lier date as the Commission may determine, unless— (A) the Commission, by notice to SIPC set- ting forth the reasons therefor, disapproves such proposed bylaw change as being con- trary to the public interest or contrary to the purposes of this chapter; or (B) the Commission finds that such pro- posed bylaw change involves a matter of such significant public interest that public comment should be obtained, in which case it may, after notifying SIPC in writing of such finding, require that the procedures set forth in paragraph (2) be followed with re- spect to such proposed bylaw change, in the same manner as if such proposed bylaw change were a proposed rule change within the meaning of such paragraph. (2) Proposed rule changes (A) Filing of proposed rule changes The Board of Directors of SIPC shall file with the Commission, in accordance with such rules as the Commission may prescribe, a copy of any proposed rule or any proposed amendment to or repeal of any rule of SIPC (hereinafter in this subsection collectively referred to as a ‘‘proposed rule change’’), ac- companied by a concise general statement of the basis and purpose of such proposed rule change. The Commission shall, upon the fil- ing of any proposed rule change, publish no- tice thereof, together with the terms of sub- stance of such proposed rule change or a de- scription of the subjects and issues involved. The Commission shall give interested per- sons an opportunity to submit written data, views, and arguments with respect to such proposed rule change. No proposed rule change shall take effect unless approved by the Commission or otherwise permitted in accordance with the provisions of this para- graph. (B) Action by the Commission Within thirty-five days after the date of publication of notice of the filing of a pro- posed rule change, or within such longer pe- riod as the Commission may designate of not more than ninety days after such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or as Page 480 TITLE 15—COMMERCE AND TRADE § 78ccc to which SIPC consents, the Commission shall— (i) by order approve such proposed rule change; or (ii) institute proceedings to determine whether such proposed rule change should be disapproved. (C) Proceedings Proceedings instituted with respect to a proposed rule change pursuant to subpara- graph (B)(ii) shall include notice of the grounds for disapproval under consideration and opportunity for hearing, and shall be concluded within one hundred eighty days after the date of publication of notice of the filing of such proposed rule change. At the conclusion of such proceedings, the Commis- sion shall, by order, approve or disapprove such proposed rule change. The Commission may extend the time for conclusion of such proceedings for not more than sixty days if it finds good cause for such extension and publishes its reasons for so finding, or for such longer period as to which SIPC con- sents. (D) Grounds for approval or disapproval The Commission shall approve a proposed rule change if it finds that such proposed rule change is in the public interest and is consistent with the purposes of this chapter, and any proposed rule change so approved shall be given force and effect as if promul- gated by the Commission. The Commission shall disapprove a proposed rule change if it does not make the finding referred to in the preceding sentence. The Commission shall not approve any proposed rule change prior to thirty days after the date of publication of notice of the filing thereof, unless the Commission finds good cause for so doing and publishes its reasons for so finding. (E) Exception Notwithstanding any other provision of this paragraph, a proposed rule change may take effect— (i) upon the date of filing with the Com- mission, if such proposed rule change is designated by SIPC as relating solely to matters which the Commission, consistent with the public interest and the purposes of this subsection, determines by rule do not require the procedures set forth in this paragraph; or (ii) upon such date as the Commission shall for good cause determine. Any pro- posed rule change which takes effect under this clause shall be filed promptly there- after and reviewed in accordance with the provisions of subparagraph (A). At any time within sixty days after the date of filing of any rule change which has taken effect pursuant to this subparagraph, the Commission may summarily abrogate such rule change and require that it be refiled and reviewed in accordance with the provisions of this paragraph, if the Commission finds that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter. Any action of the Commission pursuant to the preceding sen- tence shall not affect the validity or force of a rule change during the period it was in ef- fect and shall not be reviewable under sec- tion 78y of this title or deemed to be final agency action for purposes of section 704 of title 5. (3) Action required by Commission The Commission may, by such rules as it de- termines to be necessary or appropriate in the public interest or to carry out the purposes of this chapter, require SIPC to adopt, amend, or repeal any SIPC bylaw or rule, whenever adopted. (Pub. L. 91–598, § 3, Dec. 30, 1970, 84 Stat. 1637; Pub. L. 95–283, §§ 2–5, May 21, 1978, 92 Stat. 249–251; Pub. L. 106–554, § 1(a)(5) [title II, § 203(d)(2)], Dec. 21, 2000, 114 Stat. 2763, 2763A–424.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a) to (c) and (e), was in the original ‘‘this Act’’, meaning Pub. L. 91–598, Dec. 30, 1970, 84 Stat. 1636. For complete classification of this Act to the Code, see Tables. The District of Columbia Nonprofit Corporation Act, referred to in subsec. (a)(1)(B), is Pub. L. 87–569, Aug. 6, 1962, 76 Stat. 265, which is not classified to the Code. AMENDMENTS 2000—Subsec. (a)(2)(A)(iii). Pub. L. 106–554 added cl. (iii). 1978—Subsec. (a). Pub. L. 95–283, § 2(a), substituted ‘‘Creation and membership’’ for ‘‘Creation’’ in heading, redesignated introductory text and cls. (1) and (3) as par. (1), and added par. 2 which incorporated provisions formerly contained in cl. (2) as par. (2)(A). Subsec. (b). Pub. L. 95–283, § 3, in par. (1) substituted ‘‘State, Federal, or other court’’ for ‘‘court, State, or Federal’’, in par. (3) substituted provisions relating to adoption, etc., of bylaws by the Board of Directors, for provisions relating to adoption, etc., of bylaws and rules by the Board of Directors, added par. (4), and re- designated former pars. (4) to (8) as (5) to (9), respec- tively. Subsec. (c)(2)(C)(ii). Pub. L. 95–283, § 4(a), substituted ‘‘a broker or dealer or associated with a member of a national securities exchange, within the meaning of section 78c(a)(18) or section 78c(a)(21), respectively, of this title, or similarly associated with any self-regu- latory organization or other securities industry group,’’ for ‘‘any broker or dealer, within the meaning of paragraph (18) of section 78c(a) of this title, or simi- larly associated with a national securities exchange or other securities industry group’’. Subsec. (c)(5). Pub. L. 95–283, § 4(b), substituted ‘‘Com- pensation’’ for ‘‘Compensation, etc.’’ in heading, and in text struck out provisions relating to determinations of dollar volume of trading on exchanges. Subsec. (e). Pub. L. 95–283, § 5, inserted ‘‘and rules’’ after ‘‘Bylaws’’ in heading, and in text substituted pro- visions relating to procedures applicable to proposed changes in the bylaws and rules of SIPC and required action by the Commission with respect to any SIPC bylaw or rule, for provisions relating to procedures ap- plicable to adoption of initial bylaws and rules of SIPC and any alteration, supplement, repeal, or addition, ef- fective date of any such bylaw or rule, and required ac- tion by the Commission with respect to any SIPC bylaw or rule. Subsec. (f). Pub. L. 95–283, § 2(b), struck out subsec. (f) which set forth qualifications for other members of SIPC. Page 481 TITLE 15—COMMERCE AND TRADE § 78ddd § 78ddd. SIPC Fund (a) In general (1) Establishment of fund SIPC shall establish a ‘‘SIPC Fund’’ (herein- after in this chapter referred to as the ‘‘fund’’). All amounts received by SIPC (other than amounts paid directly to any lender pur- suant to any pledge securing a borrowing by SIPC) shall be deposited in the fund, and all expenditures made by SIPC shall be made out of the fund. (2) Balance of the fund Except as otherwise provided in this section, the balance of the fund at any time shall con- sist of the aggregate at such time of the fol- lowing items: (A) Cash on hand or on deposit. (B) Amounts invested in United States Government or agency securities. (C) Such confirmed lines of credit as SIPC may from time to time maintain, other than those maintained pursuant to paragraph (4). (3) Confirmed lines of credit For purposes of this section, the amount of confirmed lines of credit as of any time is the aggregate amount which SIPC at such time has the right to borrow from banks and other financial institutions under confirmed lines of credit or other written agreements which pro- vide that moneys so borrowed are to be repay- able by SIPC not less than one year from the time of such borrowings (including, for pur- poses of determining when such moneys are repayable, all rights of extension, refunding, or renewal at the election of SIPC). (4) Other lines SIPC may maintain such other confirmed lines of credit as it considers necessary or ap- propriate, and such other confirmed lines of credit shall not be included in the balance of the fund, but amounts received from such lines of credit may be disbursed by SIPC under this chapter as though such amounts were part of the fund. (b) Initial required balance for fund Within one hundred and twenty days from De- cember 30, 1970, the balance of the fund shall ag- gregate not less than $75,000,000, less any amounts expended from the fund within that pe- riod. (c) Assessments (1) Initial assessments Each member of SIPC shall pay to SIPC, or the collection agent for SIPC specified in sec- tion 78iii(a) of this title, on or before the one hundred and twentieth day following Decem- ber 30, 1970, an assessment equal to one-eighth of 1 per centum of the gross revenues from the securities business of such member during the calendar year 1969, or if the Commission shall determine that, for purposes of assessment pursuant to this paragraph, a lesser percent- age of gross revenues from the securities busi- ness is appropriate for any class or classes of members (taking into account relevant fac- tors, including but not limited to types of business done and nature of securities sold), such lesser percentages as the Commission, by rule or regulation, shall establish for such class or classes, but in no event less than one sixteenth of 1 per centum for any such class. In no event shall any assessment upon a mem- ber pursuant to this paragraph be less than $150. (2) General assessment authority SIPC shall, by bylaw, impose upon its mem- bers such assessments as, after consultation with self-regulatory organizations, SIPC may deem necessary and appropriate to establish and maintain the fund and to repay any bor- rowings by SIPC. Any assessments so made shall be in conformity with contractual obli- gations made by SIPC in connection with any borrowing incurred by SIPC. Subject to para- graph (3) and subsection (d)(1)(A), any such as- sessment upon the members, or any one or more classes thereof, may, in whole or in part, be based upon or measured by (A) the amount of their gross revenues from the securities business, or (B) all or any of the following fac- tors: the amount or composition of their gross revenues from the securities business, the number or dollar volume of transactions ef- fected by them, the number of customer ac- counts maintained by them or the amounts of cash and securities in such accounts, their net capital, the nature of their activities (whether in the securities business or otherwise) and the consequent risks, or other relevant fac- tors. (3) Limitations Notwithstanding any other provision of this chapter— (A) no assessment shall be made upon a member otherwise than pursuant to para- graph (1) or (2) of this subsection, (B) an assessment may be made under paragraph (2) of this subsection at a rate in excess of one-half of one per centum during any twelve-month period if SIPC deter- mines, in accordance with a bylaw, that such rate of assessment during such period will not have a material adverse effect on the fi- nancial condition of its members or their customers, except that no assessments shall be made pursuant to such paragraph upon a member which require payments during any such period which exceed in the aggregate one per centum of such member’s gross reve- nues from the securities business for such period, and (C) no assessment shall include any charge based upon the member’s activities (i) in the distribution of shares of registered open end investment companies or unit investment trusts, (ii) in the sale of variable annuities, (iii) in the business of insurance, or (iv) in the business of rendering investment advi- sory services to one or more registered in- vestment companies or insurance company separate accounts.