SIPC Modernization Task Force Issues Report
Diverse Group of Securities Experts Make Recommendations For Future of Organization
WASHINGTON, Feb. 21, 2012 /PRNewswire-USNewswire/ -- The report of the SIPC Modernization Task Force outlining legislative recommendations and other changes related to the Securities Investor Protection Corporation (SIPC) is now in the hands of the SIPC Board of Directors.
The SIPC Modernization Task Force was created in June 2010 to review the operations of SIPC and to recommend needed changes. The Task Force held a total of 14 meetings and created a Web site (http://www.SIPCModernization.org) to collect suggestions directly from the public. The Task Force also gathered extensive public input during two public forums, one held online in September 2010 and the other in person in New York City in June 1, 2011. In addition, the Task Force received in-person presentations and written contributions from, investor education experts, representatives of the mutual fund industry, and other expert parties.
The Task Force held a series of meetings in New York and Washington, and set up two subcommittees to deal with major issue areas. Possible changes to SIPC were reviewed and debated, with the final result being that the SIPC Modernization Task Force report contains 15 recommendations that have been presented to the SIPC Board.
The SIPC Modernization Task Force Report is available online at http://www.sipc.org.
SIPC Chairman Orlan Johnson, who served as chairman of the Task Force, praised the members of the group who reviewed all aspects of SIPC's operations.
Chairman Johnson stated: "The strength of the Task Force report is the diversity of the public and professional voices that it represents. The Task Force was a far-ranging group of professionals with differing approaches. It featured investor advocates, state regulatory officials, an academic expert, a trustee experienced in the 'real world' problems of brokerage firm insolvency, the chairman of SIPC's Chinese counterpart, and securities industry representatives. Their divergent views make for a balanced set of proposals worthy of serious consideration by the SIPC Board."
SIPC's Vice Chair Sharon Bowen, who served as vice chair of the Task Force, presided over the live forum in New York. Bowen stated: "I was moved by the personal stories people brought to our attention. The Task Force thanks the people who participated either in person, over the Internet, or by correspondence. We were committed to getting the input of investors and other members of the public and I believe that we succeeded in doing so."
Chairman Johnson noted that some of the recommendations would require Congressional action, and other recommendations could be implemented by rulemaking. Further, he noted, some of the proposals could be implemented without the need for either legislation or rulemaking.
Johnson also noted that the SIPC Board will consider the Task Force's recommendations after reviewing all appropriate materials and commissioning any further empirical analysis it deems necessary.
The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, owing customers cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.
The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities - such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims for customer cash and/or securities custodied with the broker for up to a maximum of $500,000 per customer. This figure includes a maximum of $250,000 on claims for cash. From the time Congress created it in 1970 through December 2010, SIPC has advanced $ 1.6 billion in order to make possible the recovery of $ 109.3 billion in assets for an estimated 739,000 investors.
All non-media/investor inquiries of SIPC should be directed to firstname.lastname@example.org or (202) 371-8300.
SOURCE Securities Investor Protection Corporation, Washington, D.C.