« AnteriorContinuar »
SECURITIES INVESTOR PROTECTION ACT OF 1970
(References in brackets [ ] are to title 15, United States Code) AN ACT to provide greater protection for customers of registered brokers and dealers and members of national securities exchanges.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. [78aaa] SHORT TITLE, ETC.
(a) SHORT TITLE; TABLE OF CONTENTS.-This Act, with the following table of contents, may be cited as the "Securities Investor Protection Act of 1970".
(b) SECTION HEADINGS.-Headings for sections and subsections, and the table of contents, are included only for convenience, and shall be given no legal effect.
SEC. 2. [78bbb] APPLICATION OF SECURITIES EXCHANGE ACT OF 1934. Except as otherwise provided in this Act, the provisions of the Securities Exchange Act of 1934 (15 U.S.C., sec. 78a and fol.; hereinafter referred to as the "1934 Act") apply as if this Act constituted an amendment to, and was included as a section of, such Act. SEC. 3. [78ccc] SECURITIES INVESTOR PROTECTION CORPORATION. (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 cor
poration by, the District of Columbia Nonprofit Corporation Act (D.C. Code, section 29-1001 and fol.).
(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 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.
(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 State, Federal, or other court;
(2) to adopt, alter, and use a corporate seal, which shall be judicially noticed;
(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 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;
(5) to conduct its business (including the carrying on 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 other jurisdiction without regard to any qualification, licensing, or other statute in such State or other jurisdiction;
(6) 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;
(7) 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;
(8) 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
(9) by bylaw, to establish its fiscal year.
(c) BOARD OF DIRECTORS.
(1) FUNCTIONS.-SIPC 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 be 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 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 associated with any self-regulatory organization 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.-All matters relating to compensation of directors 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 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 SIPC (hereinafter in this paragraph collectively referred to as