I 
113TH CONGRESS 
1ST SESSION 
H. R. 827 
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 Securi-
ties Investor Protection Corporation, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 26, 2013 
Mr. CASSIDY (for himself and Mr. DEUTCH) 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 Inves-
tor Protection Corporation, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives 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 2013’’ or the 
‘‘Improving SIPC Act of 2013’’. 
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SEC. 2. CUSTOMER PAYMENT DURING PENDING ACTION. 
(a) IN GENERAL.—Section 11 of the Securities Inves-
tor Protection Act of 1970 (15 U.S.C. 78ggg) is amend-
ed— 
(1) by redesignating subsections (c) and (d) as 
subsections (d) and (e), respectively; and 
(2) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) CUSTOMER PAYMENT DURING PENDING AC-
TION.— 
‘‘(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 al-
lows customers to make the election described 
under subparagraph (A), each customer choos-
ing to make such election must make such elec-
tion during the action brought under subsection 
(b), but in no case later than the 180-day pe-
riod beginning on the date that SIPC chooses 
to allow such election. 
‘‘(2) METHOD OF PAYMENT.— 
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‘‘(A) IN GENERAL.—To the extent prac-
ticable, 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 less-
er 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 pay-
ments 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 
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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 debt-
or 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 de-
scribed 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
DE-
POSIT.—For purposes of this subsection, a certifi-
cate of deposit purchased by a person through an 
account with the debtor shall be treated as cash de-
posited 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. 
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‘‘(7) JUDICIAL REVIEW OF CERTAIN SIPC DE-
TERMINATIONS.—With respect to any person who is 
not permitted to make an election under this sub-
section 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 reg-
ulations as may be necessary to carry out this sub-
section. 
‘‘(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 ac-
tion 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 qualifica-
tion as a customer for purposes of section 11(c) of the 
Securities Investor Protection Act of 1970 shall have no 
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effect on whether such person qualifies as a customer 
under any other provision of such Act. 
Æ 
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