§ 78fff-3. — SIPC advances.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC78fff-3]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B-1--SECURITIES INVESTOR PROTECTION
Sec. 78fff-3. SIPC advances
(a) Advances for customers' claims
In order to provide for prompt payment and satisfaction of net
equity claims of customers of the debtor, SIPC shall advance to the
trustee such moneys, not to exceed $500,000 for each customer, as may be
required to pay or otherwise satisfy claims for the amount by which the
net equity of each customer exceeds his ratable share of customer
property, except that--
(1) if all or any portion of the net equity claim of a customer
in excess of his ratable share of customer property is a claim for
cash, as distinct from a claim for securities, the amount advanced
to satisfy such claim for cash shall not exceed $100,000 for each
such customer;
(2) a customer who holds accounts with the debtor in separate
capacities shall be deemed to be a different customer in each
capacity;
(3) if all or any portion of the net equity claim of a customer
in excess of his ratable share of customer property is satisfied by
the delivery of securities purchased by the trustee pursuant to
section 78fff-2(d) of this title, the securities so purchased shall
be valued as of the filing date for purposes of applying the dollar
limitations of this subsection;
(4) no advance shall be made by SIPC to the trustee to pay or
otherwise satisfy, directly or indirectly, any net equity claim of a
customer who is a general partner, officer, or director of the
debtor, a beneficial owner of five per centum or more of any class
of equity security of the debtor (other than a nonconvertible stock
having fixed preferential dividend and liquidation rights), a
limited partner with a participation of five per centum or more in
the net assets or net profits of the debtor, or a person who,
directly or indirectly and through agreement or otherwise, exercised
or had the power to exercise a controlling influence over the
management or policies of the debtor; and
(5) no advance shall be made by SIPC to the trustee to pay or
otherwise satisfy any net equity claim of any customer who is a
broker or dealer or bank, other than to the extent that it shall be
established to the satisfaction of the trustee, from the books and
records of the debtor or from the books and records of a broker or
dealer or bank, or otherwise, that the net equity claim of such
broker or dealer or bank against the debtor arose out of
transactions for customers of such broker or dealer or bank (which
customers are not themselves a broker or dealer or bank or a person
described in paragraph (4)), in which event each such customer of
such broker or dealer or bank shall be deemed a separate customer of
the debtor.
To the extent moneys are advanced by SIPC to the trustee to pay or
otherwise 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 customers with the rights and priorities provided in this
chapter, except that SIPC as subrogee may assert no claim against
customer property until after the allocation thereof to customers as
provided in section 78fff-2(c) of this title.
(b) Other advances
SIPC shall advance to the trustee--
(1) such moneys as may be required to carry out section 78fff-
2(e) of this title; and
(2) to the extent the general estate of the debtor is not
sufficient to pay any and all costs and expenses of administration
of the estate of the debtor and of the liquidation proceeding, the
amount of such costs and expenses.
(c) Discretionary advances
SIPC may advance to the trustee such moneys as may be required to--
(1) pay or guarantee indebtedness of the debtor to a bank,
lender, or other person under section 78fff-1(b)(2) of this title;
(2) guarantee or secure any indemnity under section 78fff-2(f)
of this title; and
(3) purchase securities under section 78fff-2(d) of this title.
(Pub. L. 91-598, Sec. 9, as added Pub. L. 95-283, Sec. 9, May 21, 1978,
92 Stat. 265; amended Pub. L. 96-433, Sec. 1, Oct. 10, 1980, 94 Stat.
1855.)
References in Text
This chapter, referred to in subsec. (a), 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.
Prior Provisions
A prior section 9 of Pub. L. 91-598 was renumbered section 13 and is
classified to section 78iii of this title.
Amendments
1980--Subsec. (a). Pub. L. 96-433, Sec. 1(1), substituted in opening
par. ``$500,000'' for ``$100,000''.
Subsec. (a)(1). Pub. L. 96-433, Sec. 1(2), substituted ``$100,000''
for ``$40,000''.
Effective Date of 1980 Amendment
Amendment by Pub. L. 96-433 effective Oct. 10, 1980, see section
5(a) of Pub. L. 96-433, set out as a note under section 78u of this
title.
Section Referred to in Other Sections
This section is referred to in sections 78eee, 78fff, 78fff-2,
78fff-4 of this title.
