[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Notices]
[Pages 40052-40053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19467]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Release No. SIPA-159/July 25, 1996]


Securities Investor Protection Act of 1970; Securities Investor 
Protection Corporation; Notice of Determination That WestLB Securities 
Americas Inc. Is a Member of SIPC

    Notice is hereby given that on June 11, 1996, the Securities 
Investor Protection Corporation (``SIPC'') informed the Securities and 
Exchange Commission (``Commission'') that WestLB Securities Americas 
Inc. (``WestLB'') is no longer eligible for the exclusion from SIPC 
membership under section 3(a)(2)(A)(i) \1\ of the Securities Investor 
Protection Act of 1970 (``SIPA''). The Commission is publishing this 
notice to inform the public that, pursuant to SIPC's determination, 
WestLB is now a member of SIPC.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. Sec. 78ccc(a)(2)(A)(i) (1995).
---------------------------------------------------------------------------

I. Introduction

    Section 3(a)(2) \2\ of SIPA provides that, with certain exceptions, 
all broker-dealers registered pursuant to Section 15(b) \3\ of the 
Securities Exchange Act of 1934 are members of SIPC. Section 
3(a)(2)(A)(i) provides an exception to SIPC membership for broker-
dealers whose principal business, in the determination of SIPC, taking 
into account the business of affiliated entities, is conducted outside 
the United States and its territories and possessions.
---------------------------------------------------------------------------

    \2\ 15 U.S.C. Sec. 78ccc(a)(2)(A) (1995).
    \3\ 15 U.S.C. Sec. 78o(b) (1995).
---------------------------------------------------------------------------

II. Background and Discussion

    WestLB, formerly known as RWS Securities, Inc., is a corporation 
organized under the laws of the United States and is a wholly owned 
subsidiary of Westdeusche Landesbank

[[Page 40053]]

Gironzentrale (``Westdeusche Landesbank''). WestLB registered with the 
Commission pursuant to Section 15(b) on June 4, 1976 and is a member of 
the National Association of Securities Dealers, Inc. In 1985, SIPC 
determined that WestLB qualified for an exception from SIPC membership 
under Section 3(a)(2)(A)(i), and on July 17, 1985, the Commission 
affirmed SIPC's determination that WestLB was a person whose business 
was conducted outside the United States, its territories and 
possessions, and therefore was not a member of SIPC.\4\ At that time, 
WestLB had only one customer, Westdeusche Landesbank, located in 
Germany, and the firm cleared all of its transactions on a fully 
disclosed basis through a SIPC member. Although WestLB received 
revenues from its clearing broker in the United States, those revenues 
stemmed exclusively from transactions conducted by WestLB for 
Westdeusche Landesbank, acting on behalf of its customers located in 
Germany.
---------------------------------------------------------------------------

    \4\ Release No. SIPA-124 (July 17, 1985).
---------------------------------------------------------------------------

    However, on June 11, 1996, SIPC determined that WestLB is no longer 
eligible for exclusion from SIPC membership under Section 3(a)(2)(A)(i) 
of SIPA because WestLB's principal business is no longer conducted 
outside the United States, its territories or possessions.\5\ In the 
information supplied to SIPC, WestLB now reports that it has U.S. 
customers and that the majority of its gross revenues from the 
securities business for its latest fiscal year arise out of 
transactions in the United States, its territories, and possessions.
---------------------------------------------------------------------------

    \5\ Letter from Stephen P. Harbeck, Secretary, SIPC, to Arthur 
Levitt, Chairman, SEC, dated June 11, 1996.
---------------------------------------------------------------------------

III. Protection Under SIPA

    The effect of SIPC's determination is that WestLB now is a member 
of SIPC; therefore, WestLB's customers are afforded the protections of 
SIPA. In the event of a broker-dealer's liquidation, under SIPA, 
customers of a failed firm receive securities that are in the 
possession of the firm, that are registered in their names and that are 
not in negotiable form. Customers are then entitled to their pro rata 
share of all remaining cash and securities of customers held by the 
firm. After the above distribution, SIPC funds are available to satisfy 
the remaining claims of each customer up to a maximum of $500,000, 
including no more than $100,000 for cash claims (as distinct from 
claims for securities).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-19467 Filed 7-30-96; 8:45 am]
BILLING CODE 8010-01-M