[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4002 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 4002

To amend the Securities Investor Protection Act of 1970 to provide one-
time payments from the SIPC Fund for customers during a pending lawsuit 
   by the Securities and Exchange Commission against the Securities 
        Investor Protection Corporation, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 9, 2012

    Mr. Cassidy (for himself, Mr. Deutch, Mr. Harper, Mr. Duncan of 
 Tennessee, Mr. Alexander, Mr. West, Mr. Boustany, Mr. Culberson, Mr. 
  McCaul, Mr. Landry, Mr. Sessions, Mr. Griffin of Arkansas, and Mr. 
Hastings of Florida) introduced the following bill; which was referred 
                 to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To amend the Securities Investor Protection Act of 1970 to provide one-
time payments from the SIPC Fund for customers during a pending lawsuit 
   by the Securities and Exchange Commission against the Securities 
        Investor Protection Corporation, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improving Security for Investors and 
Providing Closure Act of 2012'' or the ``Improving SIPC Act of 2012''.

SEC. 2. CUSTOMER PAYMENT DURING PENDING ACTION.

    (a) In General.--Section 11 of the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78ggg) is amended--
            (1) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (2) by inserting after subsection (b) the following:
    ``(c) Customer Payment During Pending Action.--
            ``(1) One-time payment permitted.--
                    ``(A) In general.--At the time that an action is 
                initiated under subsection (b), SIPC may choose to 
                allow all customers of the debtor to elect to receive a 
                one-time payment from the SIPC Fund to settle their net 
                equity claims against the debtor.
                    ``(B) Customer election.--If SIPC allows customers 
                to make the election described under subparagraph (A), 
                each customer choosing to make such election--
                            ``(i) must make such election during the 
                        action brought under subsection (b), but in no 
                        case later than the 180-day period beginning on 
                        the date that SIPC chooses to allow such 
                        election; and
                            ``(ii) shall forgo all other possible 
                        protections under this Act with respect to the 
                        debtor.
            ``(2) Method of payment.--
                    ``(A) In general.--To the extent practicable, one-
                time payments made under this subsection shall be made 
                in the same manner as payments of net equity claims of 
                customers of a debtor are made under the other 
                provisions of this Act.
                    ``(B) Payment amount limited to claims.--The amount 
                paid to a customer under this subsection may not exceed 
                the customer's net equity claims against the debtor.
            ``(3) Cap on one-time payments.--At the time the action is 
        initiated under subsection (b), SIPC shall set a cap on the 
        amount of one-time payments that can be made under this 
        subsection, and such cap--
                    ``(A) shall not exceed $500,000; and
                    ``(B) shall apply equally to all customers of the 
                debtor.
            ``(4) Effect of election.--With respect to any customer who 
        receives a one-time payment under this subsection, SIPC shall 
        be subrogated to all rights of the customer against the debtor, 
        regardless of whether the one-time payment was in an amount to 
        fully satisfy the customer's claims against the debtor.
            ``(5) Notice; technical assistance.--If SIPC allows 
        customers to make the election described under paragraph 
        (1)(A), SIPC shall--
                    ``(A) promptly notify each customer of the debtor 
                of their rights under this subsection; and
                    ``(B) provide technical assistance to such 
                customers to determine if they should make an election 
                under paragraph (1)(B).
            ``(6) Treatment of certificates of deposit.--For purposes 
        of this subsection, a certificate of deposit purchased by a 
        person through an account with the debtor shall be treated as 
        cash deposited and held by the debtor in an amount equal to the 
        amount the person paid for the certificate of deposit, less any 
        amounts paid to such person on the certificate of deposit.
            ``(7) Rulemaking.--SIPC may issue such regulations as may 
        be necessary to carry out this subsection.
            ``(8) Debtor defined.--For purposes of this subsection, the 
        term `debtor' means the broker or dealer that is the subject of 
        the action brought under subsection (b).''.
    (b) Application.--With respect to an ongoing action brought under 
section 11(b) of the Securities Investor Protection Act of 1970 (15 
U.S.C. 78ggg(b)) before the date of the enactment of this Act, the 
customer election available under section 11(c) of such Act may be made 
during the 180-day period beginning on the date of the enactment of 
this Act.
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