15 U.S.C. § 78ggg — SEC functions

Page 495 TITLE 15—COMMERCE AND TRADE § 78ggg commence on the date of first publication under this subsection and no claim by a customer shall be paid or otherwise satisfied by SIPC unless re- ceived within the six-month period beginning on such date, except that SIPC shall, upon applica- tion within such period, and for cause shown, grant a reasonable, fixed extension of time for the filing of a claim by the United States, by a State or political subdivision thereof, or by an infant or incompetent person without a guard- ian. (c) Payments to customers SIPC shall promptly satisfy all obligations of the member to each of its customers relating to, or net equity claims based upon, securities or cash by the delivery of securities or the effect- ing of payments to such customer (subject to the provisions of section 78fff–2(d) of this title and section 78fff–3(a) of this title insofar as such obligations are ascertainable from the books and records of the member or are otherwise es- tablished to the satisfaction of SIPC. For pur- poses of distributing securities to customers, all securities shall be valued as of the close of busi- ness on the date of publication under subsection (b). Any payment or delivery of securities pursu- ant to this section may be conditioned upon the execution and delivery, in a form to be deter- mined by SIPC, of appropriate receipts, sup- porting affidavits, releases, and assignments. To the extent moneys of SIPC are used to satisfy the claims of customers, in addition to all other rights it may have at law or in equity, SIPC shall be subrogated to the claims of such cus- tomers against the member. (d) Effect on claims Except as otherwise provided in this section, nothing in this section shall limit the right of any person, including any subrogee, to establish by formal proof or otherwise such claims as such person may have against the member, including claims for the payment of money and the deliv- ery of specific securities, without resort to mon- eys of SIPC. (e) Jurisdiction of Bankruptcy Courts After SIPC has published notice of the institu- tion of a direct payment procedure under this section, any person aggrieved by any determina- tion of SIPC with respect to his claim under subsection (c) may, within six months following mailing by SIPC of its determination with re- spect to such claim, seek a final adjudication of such claim. The courts of the United States hav- ing jurisdiction over cases under title 11 shall have original and exclusive jurisdiction of any civil action for the adjudication of such claim. Any such action shall be brought in the judicial district where the head office of the debtor is lo- cated. Any determination of the rights of a cus- tomer under subsection (c) shall not prejudice any other right or remedy of the customer against the member. (f) Discontinuance of direct payment procedures If, at any time after the institution of a direct payment procedure with respect to a member, SIPC determines, in its discretion, that continu- ation of such direct payment procedure is not appropriate, SIPC may cease such direct pay- ment procedure and, upon so doing, may seek a protective decree pursuant to section 78eee of this title. To the extent payments of cash, dis- tributions of securities, or determinations with respect to the validity of a customer’s claim are made under this section, such payments, dis- tributions, and determinations shall be recog- nized and given full effect in the event of any subsequent liquidation proceeding. Any action brought under subsection (e) and pending at the time of the appointment of a trustee under sec- tion 78eee(b)(3) of this title shall be permanently stayed by the court at the time of such appoint- ment, and the court shall enter an order direct- ing the transfer or removal to it of such suit. Upon such removal or transfer the complaint in such action shall constitute the plaintiff’s claim in the liquidation proceeding, if appropriate, and shall be deemed received by the trustee on the date of his appointment regardless of the date of actual transfer or removal of such action. (g) References For purposes of this section, any reference to the trustee in sections 78fff–1(b)(1), 78fff–2(d), 78fff–2(f), 78fff–3(a), 78lll(5) and 78lll(12) of this title shall be deemed a reference to SIPC, and any reference to the date of publication of no- tice under section 78fff–2(a) of this title shall be deemed a reference to the publication of notice under this section. (Pub. L. 91–598, § 10, as added Pub. L. 95–283, § 9, May 21, 1978, 92 Stat. 266; amended Pub. L. 95–598, title III, § 308(n), Nov. 6, 1978, 92 Stat. 2675.) Editorial Notes PRIOR PROVISIONS A prior section 10 of Pub. L. 91–598 was renumbered section 14 and is classified to section 78jjj of this title. AMENDMENTS 1978—Subsec. (e). Pub. L. 95–598, § 308(n)(3), which di- rected striking out ‘‘, without regard to the citizenship of the parties or the amount in the controversy’’, was executed by striking out ‘‘, without regard to the citi- zenship of the parties or the amount in controversy’’ after ‘‘adjudication of such claim’’ to reflect the prob- able intent of Congress. Pub. L. 95–598, § 308(n)(1), (2), substituted ‘‘Bank- ruptcy Courts’’ for ‘‘District Courts’’ in heading and ‘‘courts of the United States having jurisdiction over cases under title 11’’ for ‘‘district courts of the United States’’ in text. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95–598 effective Oct. 1, 1979, see section 402(a) of Pub. L. 95–598, set out as an Effec- tive Date note preceding section 101 of Title 11, Bank- ruptcy. § 78ggg. SEC functions (a) Administrative procedure Determinations of the Commission, for pur- poses of making rules pursuant to section 78ccc(e)(3) and section 78iii(f) of this title shall be after appropriate notice and opportunity for a hearing, and for submission of views of inter- ested persons in accordance with the rule- Page 496 TITLE 15—COMMERCE AND TRADE § 78hhh making procedures specified in section 553 of title 5, but the holding of a hearing shall not prevent adoption of any such rule or regulation upon expiration of the notice period specified in subsection (d) of such section and shall not be required to be on a record within the meaning of subchapter II of chapter 5 of such title. (b) Enforcement of actions In the event of the refusal of SIPC to commit its funds or otherwise to act for the protection of customers of any member of SIPC, the Com- mission may apply to the district court of the United States in which the principal office of SIPC is located for an order requiring SIPC to discharge its obligations under this chapter and for such other relief as the court may deem ap- propriate to carry out the purposes of this chap- ter. (c) Examinations and reports (1) Examination of SIPC, etc. The Commission may make such examina- tions and inspections of SIPC and require SIPC to furnish it with such reports and rec- ords or copies thereof as the Commission may consider necessary or appropriate in the public interest or to effectuate the purposes of this chapter. (2) Reports from SIPC As soon as practicable after the close of each fiscal year, SIPC shall submit to the Commis- sion a written report relative to the conduct of its business, and the exercise of the other rights and powers granted by this chapter, during such fiscal year. Such report shall in- clude financial statements setting forth the fi- nancial position of SIPC at the end of such fis- cal year and the results of its operations (in- cluding the source and application of its funds) for such fiscal year. The financial state- ments so included shall be examined by an independent public accountant or firm of inde- pendent public accountants, selected by SIPC and satisfactory to the Commission, and shall be accompanied by the report thereon of such accountant or firm. The Commission shall transmit such report to the President and the Congress with such comment thereon as the Commission may deem appropriate. (Pub. L. 91–598, § 11, formerly § 7, Dec. 30, 1970, 84 Stat. 1652, 1653; renumbered § 11 and amended Pub. L. 95–283, §§ 9, 10, May 21, 1978, 92 Stat. 260, 268.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (b) and (c), 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. CODIFICATION Section is comprised of section 11 of Pub. L. 91–598. Subsec. (d) of section 11 of Pub. L. 91–598 amended sec- tion 78o of this title. PRIOR PROVISIONS A prior section 11 of Pub. L. 91–598 was renumbered section 15 and is classified to section 78kkk of this title. AMENDMENTS 1978—Subsec. (a). Pub. L. 95–283 substituted ‘‘pursu- ant to section 78ccc(e)(3) and section 78iii(f) of this title’’ for ‘‘or regulations pursuant to section 78ccc(e) and 78iii(f) of this title’’. Statutory Notes and Related Subsidiaries TERMINATION OF REPORTING REQUIREMENTS For termination, effective May 15, 2000, of provisions in subsec. (c)(2) of this section relating to submittal of annual report to Congress, see section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance, and page 191 of House Document No. 103–7. § 78hhh. Examining authority functions Each member of SIPC shall file with such member’s examining authority, or collection agent if a collection agent has been designated pursuant to section 78iii(a) of this title, such in- formation (including reports of, and information with respect to, the gross revenues from the se- curities business of such member, including the composition thereof, transactions in securities effected by such member, and other information with respect to such member’s activities, wheth- er in the securities business or otherwise, in- cluding customer accounts maintained, net cap- ital employed, and activities conducted) as SIPC may determine to be necessary or appropriate for the purpose of making assessments under section 78ddd of this title. The examining au- thority or collection agent shall file with SIPC all or such part of such information (and such compilations and analyses thereof) as SIPC, by bylaw or rule, shall prescribe. No application, report, or document filed pursuant to this sec- tion shall be deemed to be filed pursuant to sec- tion 78r of this title. (Pub. L. 91–598, § 12, formerly § 8, Dec. 30, 1970, 84 Stat. 1653; renumbered § 12 and amended Pub. L. 95–283, §§ 9, 11, May 21, 1978, 92 Stat. 260, 268.) Editorial Notes PRIOR PROVISIONS A prior section 12 of Pub. L. 91–598 was renumbered section 16 and is classified to section 78lll of this title. AMENDMENTS 1978—Pub. L. 95–283 inserted provisions relating to ap- plicability to a collection agent. § 78iii. Functions of self-regulatory organizations (a) Collection agent Each self-regulatory organization shall act as collection agent for SIPC to collect the assess- ments payable by all members of SIPC for whom such self-regulatory organization is the exam- ining authority, unless SIPC designates a self- regulatory organization other than the exam- ining authority to act as collection agent for any member of SIPC who is a member of or par- ticipant in more than one self-regulatory orga- nization. If the only self-regulatory organization of which a member of SIPC is a member or in which it is a participant is a registered clearing agency that is not the examining authority for the member, SIPC may, nevertheless, designate such registered clearing agency as collection