§ 78ccc. Securities Investor Protection Corporation

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1970

   Securities In rest or Protection Act of 1970

   Pub. L. 91–598 § 3 · 84 Stat. 1620

   Enacted · 15 U.S.C. § 78ccc

   Pub. L. 91–598, § 3, Dec. 30, 1970, 84 Stat. 1637

   Source evidence

   Code source credit
   Pub. L. 91–598, § 3, Dec. 30, 1970, 84 Stat. 1637

   Enacted provision · exact public law section
   SEC. 3. SECURITIES INVESTOR PROTECTION CORPORATION. (a) Creation.— There is hereby established a body corporate to be known as “Securities Investor Protection Corporation” (hereafter in this Act referred to as “SIPC”). SIPC shall be a nonprofit corporation and shall have succession until dissolved by act of the Congress. SIPC shall— (1) not be an agency or establishment of the United States Government; (2) be a membership corporation the members of which shall be— (A) all persons registered as brokers or dealers under section 15(b) of the 1934 Act, and 78 Stat. 570. 15 USC 78o. (B) all persons who are members of a national securities exchange, other than persons whose business as a broker or dealer consists exclusively of (i) the distribution of shares of registered open end investment companies or unit investment trusts, (ii) the sale of variable annuities, (hi) the business of insurance, or (iv) the business of rendering investment advisory services to one or more registered investment companies or insurance company separate accounts; and (3) except as otherwise provided in this Act, be subject to, and have all the powers conferred upon a nonprofit corporation by, the District of Columbia Nonprofit Corporation Act (D.C. Code, see. 29–1001 and fol.). 76 Stat. 265. (b) Powers.— In addition to the powers granted to SIPC elsewhere in this Act, 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 court, State, or Federal; (2) to adopt, alter, and use a corporate seal, which shall be judicially noticed ; (3) subject to the provisions of this Act, to adopt, amend, and repeal, by its Board of Director’s, bylaws and rules relating to the conduct of its business and the exercise of all other rights and powers granted to it by this Act; (4) to conduct its business (including the carrying mi of operations and the maintenance of offices) and to exercise all other rights and powers granted to it by this Act in any State or oilier jurisdiction without regard to any qualification, licensing, or other statute in such State or other jurisdiction; (5) to lease, purchase, accept gifts or donations of or otherwise acquire, to own, hold, improve, 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; (6) subject to the provisions of subsection (c), to elect or appoint such officers, attorneys, employees, and agents as may be required, to determine their qualifications, to define their duties, to fix their salaries, require bonds for them and fix the penalty thereof; (7) to enter into contracts, to execute instruments, 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 Act; and (8) by bylaw, to establish its fiscal year. (c) Board o F Directors.— (1) Functions.— SI PC shall have a Board of Directors which, subject to the provisions of this Act, shall 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 officers 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 lie selected from among persons who are associated with, and representative of different aspects 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 persons who are not associated with any broker or dealer, within the meaning of 78 Stat. 565. 15 USC 78c. paragraph (18) of section 3(a) of the 1934 Act, or similarly associated with a national securities exchange or other securities industry group and who have not had any such association during the two years preceding appointment. (3) Chairman and vice chairman.— The President shall designate a Chairman and Vice Chairman from among those directors 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 expiring on December 31, 1971, (ii) two shall hold office for a term expiring on December 31, 1972, and (iii) three shall hold office for a term expiring 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 appointment was made. Any director appointed to fill a vacancy occurring prior to the expiration 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, etc.— All matters relating to compensation of directors and the determination of dollar volume of trading on exchanges 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.— (1) As soon as practicable but not later than forty-five days after the date of enactment of this Act, the Board of Directors shall adopt initial bylaws and rules relating to the conduct of the business of SIPC and the,exercise of the rights and powers granted to it by this Act, and shall file a copy thereof with the Commission. Thereafter, the Board of Directors may alter, supplement, or repeal any existing bylaw or rule and may adopt additional bylaws and rules, and in each such case shall file a copy thereof with the Commission. (2) Each such initial bylaw or rule, alteration, supplement, or repeal, and additional bylaw or rule shall take effect upon the thirtieth day (or such later date as SIPC may designate) after the filing of the copy thereof with the Commission or upon such earlier date as the Commission may determine, unless the Commission shall, by notice to SIPC setting forth the reasons therefor, disapprove the same, in whole or in part, as being contrary to the public interest or contrary to the purposes of this Act. (3) The Commission may, by such rules or regulations as it determines to be necessary or appropriate in the public interest or to effectuate the purposes of this Act, require the adoption, amendment, alteration of, supplement to or rescission of any bylaw or rule by SIPC, whenever adopted. (f) Or her Members.— (1) Any person who is a broker, dealer, or member of a national securities exchange and who is excluded from membership in SIPC under subsection (a) may become a member of SIPC under such conditions and upon such terms as SIPC shall require. (2) Notwithstanding anything contained in subsections (c) and (d) of section 4, any person who becomes a member of the corporation under this subsection shall be subject to such assessments as SIPC determines to be equitable.

2. 1978

   Securities Investor Protection Act Amendments of 1978

   Pub. L. 95–283 § 2(a) · 92 Stat. 249

   1. Substituted · 15 U.S.C. § 78ccc(a)

      Pub. L. 95–283, § 2(a), substituted “Creation and membership” for “Creation” in heading

   2. Redesignated · 15 U.S.C. § 78ccc(a)

      Pub. L. 95–283, § 2(a), redesignated introductory text and cls. (1) and (3) as par. (1)

   3. Added · 15 U.S.C. § 78ccc(a)

      Pub. L. 95–283, § 2(a), added par. 2 which incorporated provisions formerly contained in cl. (2) as par. (2)(A)

   Source evidence

   Code amendment note
   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).

   Enacted provision · exact public law section
   (a) Section 3(a) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78ccc(a)) is amended to read as follows: “(a) Creation and Membership.— “(1) Creation.— There is hereby established a body corporate to be known as the ‘Securities Investor Protection Corporation’ (hereafter in this Act referred to as ‘SIPC’). SIPC shall be a nonprofit corporation and shall have succession 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 Act, be subject to, and have all the powers conferred upon a nonprofit corporation by, the District of Columbia Nonprofit Corporation Act (D.C. Code, section 29–1001 and fol.). “(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 section 15(b) of the 1934 15 USC 78o. Act, other than— “(i) persons whose principal business, in the determination of SIPC, taking into account business of affiliated entities, is conducted outside the United States and its territories and possessions; and “(ii) persons whose business as a broker or dealer consists exclusively of (I) the distribution 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 investment companies or insurance company separate accounts. “(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 Act, affirm, reverse, or amend any such determination of SIPC. “(C) Additional members.— SIPC shall provide by rule that persons excluded from membership in SIPC under subparagraph (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 availability of assets and the ability to conduct a liquidation if necessary. “(D) Disclosure.— Any broker or dealer excluded from membership 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 possessions.”.

3. 1978

   Securities Investor Protection Act Amendments of 1978

   Pub. L. 95–283 § 3 · 92 Stat. 249

   1. Substituted · 15 U.S.C. § 78ccc(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

   2. Added · 15 U.S.C. § 78ccc(b)

      Pub. L. 95–283, § 3, in par. (1) added par. (4)

   3. Redesignated · 15 U.S.C. § 78ccc(b)

      Pub. L. 95–283, § 3, in par. (1) redesignated former pars. (4) to (8) as (5) to (9), respectively

   Source evidence

   Code amendment note
   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 redesignated former pars. (4) to (8) as (5) to (9), respectively.

   Enacted provision · exact public law section
   Sec. 3. powers or sipc Section 3(b) of such Act (15 U.S.C. 78ccc(b)) is amended— (1) in paragraph (1), by striking out “court, State, or Federal” and inserting “State, Federal, or other court” in lieu thereof; and (2) by striking out paragraph (3), redesignating paragraphs (4) through (8) as paragraphs (5) through (9), respectively, and inserting immediately after paragraph (2) the following new paragraphs: “(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 Act, 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 incurred 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 consistent with the purposes of this Act. “(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 Act, including rules relating to— “(A) the definition of terms used in this Act, other than Post, p. 260. those terms for which a definition is provided in section 16; “(B) the procedures for the liquidation of members and direct payment procedures, including 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 Act;”.

4. 1978

   Securities Investor Protection Act Amendments of 1978

   Pub. L. 95–283 § 4(a) · 92 Stat. 249

   Substituted · 15 U.S.C. § 78ccc(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-regulatory 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 similarly associated with a national securities exchange or other securities industry group”

   Source evidence

   Code amendment note
   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-regulatory 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 similarly associated with a national securities exchange or other securities industry group”.

   Enacted provision · exact public law section
   (a) Section 3(c)(2)(C)(ii) of such Act (15 U.S.C. 78ccc (c)(2)(C)(ii)) is amended by striking out “associated with any” and all that follows through “group” and inserting in lieu thereof “associated with a broker or dealer or associated with a member of a national securities exchange, within the meaning of section 3(a)(18) or section 3(a)(21), respectively, of the 1934 Act, or similarly 15 USC 78c. associated with any self-regulatory organization or other securities industry group,”.

5. 1978

   Securities Investor Protection Act Amendments of 1978

   Pub. L. 95–283 § 4(b) · 92 Stat. 249

   Substituted · 15 U.S.C. § 78ccc(c)(5)

   Pub. L. 95–283, § 4(b), substituted “Compensation” for “Compensation, etc.” in heading, and in text struck out provisions relating to determinations of dollar volume of trading on exchanges

   Source evidence

   Code amendment note
   Subsec. (c)(5). Pub. L. 95–283, § 4(b), substituted “Compensation” for “Compensation, etc.” in heading, and in text struck out provisions relating to determinations of dollar volume of trading on exchanges.

   Enacted provision · exact public law section
   (b) Section 3(c)(5) of such Act (15 U.S.C. 78ccc(c)(5)) is amended to read as follows: “(5) Compensation.— All matters relating to compensation of directors shall be as provided in the bylaws of SI PC.”.

6. 1978

   Securities Investor Protection Act Amendments of 1978

   Pub. L. 95–283 § 5 · 92 Stat. 249

   Repealed · 15 U.S.C. § 78ccc(e)

   Pub. L. 95–283, § 5, inserted “and rules” after “Bylaws” in heading, and in text substituted provisions 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 applicable to adoption of initial bylaws and rules of SIPC and any alteration, supplement, repeal, or addition, effective date of any such bylaw or rule, and required action by the Commission with respect to any SIPC bylaw or rule

   Source evidence

   Code amendment note
   Subsec. (e). Pub. L. 95–283, § 5, inserted “and rules” after “Bylaws” in heading, and in text substituted provisions 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 applicable to adoption of initial bylaws and rules of SIPC and any alteration, supplement, repeal, or addition, effective date of any such bylaw or rule, and required action by the Commission with respect to any SIPC bylaw or rule.

   Enacted provision · exact public law section
   Sec. 5. bylaws and rules Section 3(e) of such Act (15 U.S.C. 78ccc(e)) is amended to read as follows: “(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 SlPC (hereinafter in this paragraph collectively referred to as a ‘proposed by law change’), accompanied by a concise general statement of the basis and purpose of such proposed bylaw change. Each such proposed 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 earlier date as the Commission may determine, unless— “(A) the Commission, by notice to SIPC setting forth the reasons therefor, disapproves such proposed bylaw change as being contrary to the public interest or contrary to the purposes of this Act; or “(B) the Commission finds that such proposed 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 respect 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’), accompanied by a concise general statement of the basis and purpose of such proposed rule change. The Notice. Commission shall, upon the filing of any proposed rule change, publish notice thereof, together with the terms of substance of such proposed rule change or a description of the subjects and issues involved. The Commission shall give interested persons 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 paragraph. “(B) Action by Tin: commission.— Within thirty-five days after the date of publication of notice of the filing of a proposed rule change, 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, or as 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. Notice.Hearing.“(C) Proceedings.— Proceedings instituted with respect to a proposed rule change pursuant to subparagraph (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 Commission 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 consents. “(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 Act, and any proposed rule change so approved shall be given force and effect as if promulgated 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 Commission, 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 proposed rule change which takes effect under this clause shall be filed promptly thereafter 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 Act. Any action of the Commission pursuant to the preceding sentence shall not affect the validity or force of a rule change during the period it was in effect and shall not be reviewable under section 25 of the 1934 Act or deemed 15 USC 78y. to be final agency action for purposes of section 704 of title 5, United States Code. “(3) Action required by commission.— The Commission may, by such rules as it determines to be necessary or appropriate in the public interest or to carry out the purposes of this Act, require SIPC to adopt, amend, or repeal any SIPC bylaw or rule, whenever adopted.”.

7. 1978

   Securities Investor Protection Act Amendments of 1978

   Pub. L. 95–283 § 2(b) · 92 Stat. 249

   Struck · 15 U.S.C. § 78ccc(f)

   Pub. L. 95–283, § 2(b), struck out subsec. (f) which set forth qualifications for other members of SIPC

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 95–283, § 2(b), struck out subsec. (f) which set forth qualifications for other members of SIPC.

   Enacted provision · exact public law section
   Repeal.(b) Section 3(f) of such Act (15 U.S.C. 78ccc(f)) is repealed.

8. 2000

   Consolidated Appropriations Act, 2001

   Pub. L. 106–554 § 1(a)(5)(tII)(s203)(d)(2) · 114 Stat. 2763

   Added · 15 U.S.C. § 78ccc(a)(2)(A)(iii)

   Pub. L. 106–554 added cl. (iii)

   Source evidence

   Code amendment note
   Subsec. (a)(2)(A)(iii). Pub. L. 106–554 added cl. (iii).

   Enacted provision · exact public law section
   (5) H.R. 5660, as introduced on December 14, 2000.

12 of 12 references resolved to an enrolled provision