Improving SIPC Act of 2013

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improving Security for Investors and 
Providing Closure Act of 2013'' or the ``Improving SIPC Act of 2013''.

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.
                    ``(B) Customer election.--If SIPC allows customers 
                to make the election described under subparagraph (A), 
                each customer choosing to make such election 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.
            ``(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 shall be equal 
                to the lesser of--
                            ``(i) the customer's net equity claim 
                        against the debtor; and
                            ``(ii) the cap set under paragraph (3).
            ``(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.--
                    ``(A) No sipc advance.--Section 9(a) shall not 
                apply with respect to any customer who receives a one-
                time payment under this subsection.
                    ``(B) Subrogation.--With respect to any customer 
                who receives a one-time payment under this subsection, 
                SIPC shall be subrogated to all rights of such customer 
                against the debtor once the customer recovers an amount 
                equal to the customer's net equity claim 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) Judicial review of certain sipc determinations.--With 
        respect to any person who is not permitted to make an election 
        under this subsection because SIPC does not identify them as a 
        customer of the debtor, such person may commence an action 
        against SIPC in the appropriate United States district court to 
        challenge the determination by SIPC that they are not a 
        customer of the debtor.
            ``(8) Rulemaking.--SIPC may issue such regulations as may 
        be necessary to carry out this subsection.
            ``(9) 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.
    (c) Rule of Construction.--A person's qualification as a customer 
for purposes of section 11(c) of the Securities Investor Protection Act 
of 1970 shall have no effect on whether such person qualifies as a 
customer under any other provision of such Act.

Summary: Improving Security for Investors and Providing Closure Act of 2013 or Improving SIPC Act of 2013 - Amends the Securities Investor Protection Act of 1970 with respect to any action in a US district court by the Securities and Exchange Commission (SEC) against the Securities Investor Protection Corporation (SIPC) in the event that SIPC refuses to commit funds or otherwise act for the protection of customers of any SIPC member . Authorizes SIPC, at the time the SEC action initiates such action, to allow all customers of the debtor broker or dealer to elect to receive a one-time payment from the SIPC Fund. Prescribes procedures for such customer election. Limits the amount paid to a customer under such election to the lesser of: (1) the customer's net equity claim against the debtor, and (2) a $500,000 cap on one-time payments. Subrogates SIPC to all rights of the customer receiving a one-time payment against the debtor once the customer recovers an amount equal to the customer's net equity claim against the debtor. Treats a certificate of deposit (CD) purchased by a person through an account with the debtor as cash deposited and held by the debtor in an amount equal to the amount the person paid for the CD, less any amounts paid to such person on the CD. Permits a person prevented from making an election under this Act because SIPC does not identify such person as a customer of the debtor to challenge that determination in federal district court.