SIPC to Reinstitute Assessments of Member Firms' Operating Revenues

Mar 02, 2009, 16:00 ET from Securities Investor Protection Corporation, Washington, D.C.

WASHINGTON, March 2 /PRNewswire/ -- The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, announced today that SIPC members assessments will be based, as of April 1, 2009, on one-quarter of 1 percent of the net operating revenues of member firms.

Currently, SIPC members are assessed a flat $150 per year.

SIPC President and CEO Stephen Harbeck said: "We are authorized under our charter from Congress to take steps necessary to ensure that we have sufficient reserves to allow us to carry out our mission and to ensure investor confidence in our operations. It is our intention to ensure that assessments keep pace with demands on our reserve."

In a letter sent today to CEOs at member firms, SIPC Chairman Armando J. Bucelo, Jr., writes: "Pursuant to the requirements of the Securities Investor Protection Act of 1970 as amended and the provisions of Article 6 of the (SIPC) corporate bylaws, SIPC has determined that the SIPC fund balance is reasonably likely to aggregate less than $1 billion and will remain less than $1 billion for a period of six months or more."

Under SIPC rules, any assessment change is to begin on the first day of the month following the date of SIPC's published determination.

SIPC member firms seeking more information should go to


The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, owing customer 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 of each customer up to a maximum of $500,000. This figure includes a maximum of $100,000 on claims for cash. From the time Congress created it in 1970 through December 2007, SIPC has advanced $507 million in order to make possible the recovery of $15.7 billion in assets for an estimated 626,000 investors.

For more information about SIPC, see "The Investor's Guide to Brokerage Firm Liquidations" at

All investor inquiries of SIPC should be directed to or (202) 371-8300

SOURCE Securities Investor Protection Corporation, Washington, D.C.