US Code Title 15 Section 78

CITE

    15 USC Sec. 78fff-3                                         01/08/2008

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2B091 - SECURITIES INVESTOR PROTECTION

HEAD

    Sec. 78fff-3. SIPC advances

STATUTE

    (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.

SOURCE

    (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.