[Federal Register Volume 91, Number 13 (Wednesday, January 21, 2026)]
[Notices]
[Pages 2579-2581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-01093]
[[Page 2579]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. SIPA-185; File No. SIPC-2026-01]
Securities Investor Protection Corporation; Notice of Inflation
Adjustment Determination
AGENCY: Securities and Exchange Commission.
ACTION: Notice.
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SUMMARY: Pursuant to section 3(e)(2) of the Securities Investor
Protection Act of 1970 (``SIPA''), notice is hereby given that the
Board of Directors of SIPC (the ``Board'') filed with the Securities
and Exchange Commission (``Commission'') on January 6, 2026,
notification that the Board has determined, beginning January 1, 2027,
and for the five year period immediately thereafter, that the standard
maximum cash advance amount available to satisfy customer claims for
cash in a SIPA liquidation proceeding will remain at $250,000. The
Commission is publishing this notice to solicit comments on Board's
determination from interested parties.
DATES: Comments are to be received on or before February 5, 2026.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/comments/sipc-2026-01/securities-investor-protection-corporation-notice-inflation-adjustment-determination#no-back); or
Send an email to [email protected]. Please include
File Number SIPC-2026-01 on the subject line.
Paper Comments
Send paper comments to Secretary, Securities and Exchange
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SIPC-2026-01. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method of submission. The Commission will post all
comments on the Commission's internet website (https://www.sec.gov/comments/sipc-2026-01/securities-investor-protection-corporation-notice-inflation-adjustment-determination#no-back). Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection.
FOR FURTHER INFORMATION CONTACT: Michael Macchiaroli, Office of
Financial Responsibility, at (202) 551-5777, Division of Trading and
Markets, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549.
I. SIPC'S Statement of the Purpose of and Statuory Basis of the
Determination of the Board of Directors of SIPC Not To Adjust the
Standard Maximum Cash Advance Amount for Inflation
In its filing with the Commission, SIPC included statements
concerning the purpose of and statutory basis of the SIPC Board's
determination. The text of these statements may be examined at the
places specified above, and appear in the text, below.
``Under Section 9(e)(1) of the Securities Investor Protection Act,
(``SIPA'', 15 U.S.C. 78aaa et seq.),\1\ the Board of Directors
(``Board'') of the Securities Investor Protection Corporation
(``SIPC'') must determine, every five years beginning no earlier and no
later than January 1, 2011, whether to adjust for inflation the
standard maximum amount that SIPC can advance to satisfy customer
claims for cash under SIPA. See SIPA Sec. 78fff-3(e)(1). The Board
analyzed the issue at its Meeting on September 18, 2025, considering
the criteria set forth in SIPA Sec. 78fff-3(e)(5).
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\1\ For convenience, references herein to provisions of SIPA
shall be to the United States Code, and shall omit ``15 U.S.C.''
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The Board has determined that an inflation adjustment of the
maximum cash advance amount would not be appropriate. Pursuant to SIPA
Sec. 78fff-3(e)(4), and subject to the approval of the Securities and
Exchange Commission (``Commission'') as provided under SIPA Sec. Sec.
78ccc(e)(2) and 78fff-3(e)(1),\2\ the standard maximum cash advance
amount of $250,000 will become effective on January 1, 2027. See SIPA
78fff-3(e)(4).\3\ Under SIPA section 78fff-3(e)(3)(A), the Commission
is required to publish in the Federal Register notice of the maximum
amount.
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\2\ SIPA Sec. 78fff-3(e)(1) provides that approval by the
Commission be obtained ``as provided under section 78ccc(e)(2)'' of
SIPA. SIPA Sec. 78ccc(e)(2) establishes procedures governing
proposed changes to SIPC's rules.
\3\ Under SIPA section 78fff-3(e)(4), any adjustment to the
amount of the cash advance would take effect on January 1 of the
year immediately after the year in which the adjustment was made.
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Amount of Potential Adjustment
As a threshold matter, were the Board to have determined that an
adjustment to the maximum cash advance amount should be made, the
adjustment is calculated by multiplying $250,000 by
[t]he ratio of the annual value of the Personal Consumption
Expenditures Chain-Type Price Index (or any successor index
thereto), published by the Department of Commerce, for the calendar
year preceding the year in which such determination is made, to the
published annual value of such index for the calendar year preceding
the year in which this subsection was enacted.
SIPA section 78fff-3(e)(1)(B). Application of the formula based on
currently available data projects to increase the limit by $100,000 to
$350,000.\4\
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\4\ Pursuant to SIPA Sec. 78fff-3(e), the $100,000 amount was
determined as follows: $250,000 multiplied by 1.3907 (the ratio of
the annual value of the Price Index for calendar year 2024, to the
annual value of the index for 2009), equals $97,684. The
determination is to be made using the annual value of the Price
Index for the ``calendar year preceding the year in which such
determination is made'' namely, the year 2025; however, the 2025
annual value will not be available until later in 2026.
Nevertheless, official releases available as of December 5, 2025,
imply that in the first half of 2025 the index increased by
approximately 1.38%. Adding to that number the inflation increase
expected by market analysts (as per the most recent edition of the
Survey of Professional Forecasters by the Federal Reserve Bank of
Philadelphia) for the second half of the year, yields an estimated
total increase for 2025 of 2.88%. Consequently, if the forecast
inflation for 2025 is added to the total adjusted amount for 2024,
the resulting total adjusted amount for 2025 would be $357,698
($250,000 plus $107,698). Under SIPA section 78fff-3(e)(2), ``If the
standard maximum cash advance amount determined under paragraph (1)
for any period is not a multiple of $10,000, the amount so
determined shall be rounded down to the nearest $10,000''.
Accordingly, the adjusted amount considering the forecasted value of
the index for 2025 would be $350,000.
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Consideration of the Statutory Criteria
In deciding whether to adjust the maximum cash advance amount, the
Board is to consider the following criteria under SIPA section 78fff-
3(e)(5):
(A) The overall state of the fund and the economic conditions
affecting members of SIPC;
(B) The potential problems affecting members of SIPC; and
(C) Such other factors as the Board of Directors of SIPC may
determine appropriate.
In furtherance of the Board's consideration of the statutory
factors, input from the staffs of the Commission, Financial Industry
Regulatory Authority (``FINRA''), and the Federal Depository Insurance
Corporation (``FDIC'') along with the staffs of the Securities Industry
and Financial Markets Association (``SIFMA'') and the American
Securities
[[Page 2580]]
Association (``ASA'') was solicited and received.
A. The Overall State of the SIPC Fund and Economic Conditions Affecting
Members, and Potential Problems Affecting Members of SIPC
In considering the overall state of the SIPC Fund and the economic
conditions affecting members of SIPC, the Board reviewed SIPC's
historical experience and examined SIPC advances in past and present
liquidation proceedings. The Board also considered potential problems
affecting members of SIPC by reviewing the current state of the
financial markets, technology advancements that may affect the
securities industry, and recent and pending changes in legislation that
may affect the securities industry. The Board believed consideration of
these statutory factors did not warrant an inflation adjustment of the
standard cash advance amount.
B. Other Factors Considered by the Board
1. Potential Divergence Between FDIC and SIPC Protections May Be
Undesirable
The Board noted, as it has in the past, the equivalency between
SIPA's cash advance limit and the ``standard maximum deposit insurance
amount'' that fixes the limit on bank deposit insurance under the
Federal Deposit Insurance Act (``FDIA''), 12 U.S.C. 1821 et seq. An
inflation adjustment to the former without a corresponding adjustment
to the latter would result in an undesirable divergence between the
cash advance limit under SIPA and the deposit insurance limit under the
FDIA.
Increases to the limit of protection for cash claims under SIPA
historically have been in lockstep with increases in FDIC deposit
insurance. The below compares the limits of protection for cash under
SIPA and the FDIA:
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SIPA FDIA
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$20,000 (Pub. L. 91-598, Sec. $20,000 (Pub. L. 91-151, Sec.
6(f)(1)(A). 7, 83 Stat. 371, 375 (1969)),
84 Stat. 1636, 1651 (1970)).
$40,000 (Pub. L. 95-283, Sec. 9, 92 $40,000 (Pub. L. 93-495, Sec.
Stat. 249, 265 (1978)). 102(a), 88 Stat. 1500, 1502
(1974)).
$100,000 (Pub. L. 96-433, Sec. 1, 94 $100,000 (Pub. L. 96-221, Sec.
Stat. 1855 (1980)). 308, 94 Stat. 132, 147
(1980)).
$250,000 (Pub. L. 111-203, Sec. 929H, $250,000 ((temporary until 12/
124 Stat. 1376, 1865. 31/2009) Pub. L. 110-343, Sec.
(2010) 136, 122 Stat. 3765,
3799 (2008); (permanent) Pub.
L. 111-203, Sec. 335, 124
Stat. 1376, 1540 (2010)).
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In 2008, and again, in 2010, parity with deposit insurance was the
primary reason for SIPC's request to Congress to increase the SIPA
limit of protection for cash claims. FDIC coverage is currently
$250,000.\5\ In 2016 and 2021, uniformity with deposit insurance was a
primary factor in the Board's determination not to adjust the standard
maximum cash advance amount.
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\5\ While the FDIA includes similar language to SIPA related to
adjusting for inflation, its adjustment is based upon a $100,000
coverage level, and the FDIC has not increased coverage under the
inflation provision. 12 U.S.C. 1821(a)(1)(F)(i)(I). See Deposit
Insurance Regulations; Permanent Increase in Standard Coverage
Amount; Advertisement of Membership; International Banking; Foreign
Banks, 75 FR 49363 n.6 (Aug. 13, 2010).
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The Board considered that a unilateral increase to the SIPA limit
could have unintended consequences considering the issue has not been
widely studied or discussed. For example, increasing the SIPA limit
above the deposit insurance limit could incentivize the movement of
funds to brokerage accounts as a savings or cash management vehicle.
These investors may not know that they would be ineligible for SIPC
protection if their deposits were unrelated to securities
investments.\6\
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\6\ See SIPA Sec. 78lll(2)(b)(i) (defining a ``customer'' under
SIPA as including ``any person who has deposited cash with the
debtor for the purpose of purchasing securities'').
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2. Based on Historical Claims Experience, an Inflation Adjustment May
Provide Limited Benefit to Retail Customers
The Board also reviewed the number of claims for cash exceeding the
limit of protection in past and present liquidation proceedings. This
data suggests that the benefit to retail customers of an inflation
adjustment may be limited. Of the more than 770,000 allowed claims in
completed or substantially completed liquidation proceedings as of
year-end 2024, only 355 were for cash and securities over the limits of
protection under SIPA, and the unsatisfied portion of cash claims
amounted to $25 million. More than half of that amount involved only
three claims. In the seven SIPA proceedings initiated since 2010, when
the cash limit was raised to $250,000, only one allowed cash claim
remains unsatisfied.
3. Aggregate Credit Balances, Retail Market Participation Rate, and
Sweeps Programs Indicate That Individual Credit Balances May Not Be
Increasing
The Board also considered that aggregate free credit balances in
customer securities accounts did not increase appreciably in the four
years since March 2021, despite the unusually robust inflation during
that same period. In addition, the Board considered that with projected
positive demographic growth and high retail market participation rates,
the number of securities accounts carried by SIPC members will likely
increase in the future, but the average free cash balance in customer
securities accounts is expected to show a stagnant or declining trend
in real terms over time. Finally, the Board considered that the
significant amount of free cash balances moved by members as part of
``sweeps'' programs continues. Member firms have continued to
experience the movement of customer free credit balances to banks
through sweeps programs.
Consequently, the lack of impact of inflation on aggregate credit
balances, the likelihood of stagnant or declining free-credit balances
in customer accounts, and the continuation in the movement of customer
free credit balances to FDIC-protected bank sweep products all mitigate
any need for an inflation adjustment.
Conclusion
The Board weighed the statutory considerations and other
appropriate factors as related to a potential inflation adjustment of
$100,000. The Board concluded that, on balance, in light of the
undesirable break with the FDIC limit that would result, with possibly
harmful consequences, and the absence of evidence that an appreciable
number of investors would benefit, an inflation adjustment to the limit
of protection for cash claims was not appropriate. Accordingly, the
Board determined, subject to Commission approval, that the standard
maximum cash advance amount will remain at $250,000 per customer.''
* * * * *
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II. Date of Effectiveness and Timing for Commission Action
Within thirty-five days of the date of publication of this notice
of the SIPC Board's determination in the Federal Register, or within
such longer period (i) 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 or (ii) as to
which SIPC consents, the Commission shall:
(A) By order approve such determination or
(B) Institute proceedings to determine whether such determination
should be disapproved.
III. Notice of the Determination of the SIPC Board Not To Adjust the
Standard Maximum Cash Advance Amount for Inflation
Effective January 1, 2026, the Board determined, under section
9(e)(1) of the SIPA, 15 U.S.C. 78fff-3(e)(1), that an inflation
adjustment to the standard maximum cash advance amount, as defined in
section 9(d) of the Securities Investor Protection Act, 15 U.S.C.
78fff-3(d), would not be appropriate for the five-year period beginning
on January 1, 2027. Accordingly, the standard maximum cash advance
amount will remain at $250,000 per customer, effective January 1, 2027,
and for the five years immediately thereafter.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(f)(3).
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Dated: January 14, 2026.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2026-01093 Filed 1-16-26; 4:15 pm]
BILLING CODE 8011-01-P