PRIA, Government Policy, Made Personal

Summary

Self-regulatory organizations must collect SIPC assessments from the members they examine. If a member belongs to more than one such group, SIPC can pick which group will collect the fee. If a member’s only group is a registered clearing agency that does not examine the member, SIPC can still name that agency to collect or tell the member to pay SIPC directly. A collecting group only forwards to SIPC the money it actually receives. Members who do not belong to any self-regulatory group must pay SIPC directly. Self-regulatory groups must inspect their members for follow‑the‑rules financial responsibility, but the Commission can take over the exams in certain cases or pick which group will do the exams when a member is in more than one group. These groups must send inspection reports to SIPC as SIPC requires. SIPC must work with the groups to spot financial trouble early, standardize exams and reports when possible, and make members file financial information and be examined often. The Commission can also require groups to give SIPC member financial records. Self-regulatory groups are not liable for actions taken in good faith under the specified SIPC duties.

Title 15, §78iii

Commerce and Trade, Source: USLM XML via OLRC

(a)Collection agent

Each self-regulatory organization shall act as collection agent for SIPC to collect the assessments payable by all members of SIPC for whom such self-regulatory organization is the examining authority, unless SIPC designates a self-regulatory organization other than the examining authority to act as collection agent for any member of SIPC who is a member of or participant in more than one self-regulatory organization. If the only self-regulatory organization of which a member of SIPC is a member or in which it is a participant is a registered clearing agency that is not the examining authority for the member, SIPC may, nevertheless, designate such registered clearing agency as collection agent for the member or may require that payments be made directly to SIPC. The collection agent shall be obligated to remit to SIPC assessments made under section 78ddd of this title only to the extent that payments of such assessment are received by such collection agent. Members of SIPC who are not members of or participants in a self-regulatory organization shall make payments directly to SIPC.

(b)Immunity

No self-regulatory organization shall have any liability to any person for any action taken or omitted in good faith pursuant to section 78eee(a)(1) and section 78eee(a)(2) of this title.

(c)Inspections

The self-regulatory organization of which a member of SIPC is a member or in which it is a participant shall inspect or examine such member for compliance with applicable financial responsibility rules, except that—

(1)if the self-regulatory organization is a registered clearing agency, the Commission may designate itself as responsible for the examination of such member for compliance with applicable financial responsibility rules; and

(2)if a member of SIPC is a member of or participant in more than one self-regulatory organization, the Commission, pursuant to section 78q(d) of this title, shall designate one of such self-regulatory organizations or itself as responsible for the examination of such member for compliance with applicable financial responsibility rules.

(d)Reports

There shall be filed with SIPC by the self-regulatory organizations such reports of inspections or examinations of the members of SIPC (or copies thereof) as may be designated by SIPC by bylaw or rule.

(e)Consultation

SIPC shall consult and cooperate with the self-regulatory organizations toward the end:

(1)that there may be developed and carried into effect procedures reasonably designed to detect approaching financial difficulty upon the part of any member of SIPC;

(2)that, as nearly as may be practicable, examinations to ascertain whether members of SIPC are in compliance with applicable financial responsibility rules will be conducted by the self-regulatory organizations under appropriate standards (both as to method and scope) and reports of such examinations will, where appropriate, be standard in form; and

(3)that, as frequently as may be practicable under the circumstances, each member of SIPC will file financial information with, and be examined by, the self-regulatory organization which is the examining authority for such member.

(f)Financial condition of members

The Commission may, by such rules as it determines necessary or appropriate in the public interest and to carry out the purposes of this chapter, require any self-regulatory organization to furnish SIPC with reports and records (or copies thereof) relating to the financial condition of members of or participants in such self-regulatory organization.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (f), was in the original “this Act”, meaning Pub. L. 91–598, Dec. 30, 1970, 84 Stat. 1636. For complete classification of this Act to the Code, see Tables.

Amendments

1978—Subsec. (a). Pub. L. 95–283, § 12(a), in heading substituted “Collection” for “Collecting”, and in text inserted provisions relating to designation of a self-regulatory organization other than the examining authority to act as collection agent and provisions relating to designation of a registered clearing agency as collection agent, and substituted provisions relating to remittances by the collection agent to SIPC, for provisions relating to remittances by an examining authority to SIPC. Subsec. (b). Pub. L. 95–283, § 12(b), inserted reference to section 78eee(a)(2) of this title. Subsec. (c). Pub. L. 95–283, § 12(c), revised existing format and provisions into introductory text and cl. (2) and, as so revised, in introductory text inserted provisions respecting participation by a member of SIPC in a self-regulatory organization and in cl. (2) inserted provisions respecting such participation and authorization for the Commission to designate itself as responsible for the statutory examination, and added cl. (1). Subsec. (f). Pub. L. 95–283, § 12(d), substituted provisions authorizing the Commission to set out rules requiring self-regulatory organizations to furnish SIPC with reports and records of members or participants in such self-regulatory organizations, for provisions authorizing the Commission to set out rules, and

Regulations

requiring self-regulatory organizations to adopt rules, practices, and procedures respecting inspections and examinations of members and examiners, to furnish SIPC and the Commission with reports and records of members, and to inspect or examine members. 1975—Subsec. (c). Pub. L. 94–29 directed the Commission to designate the self-regulatory organization to be responsible for enforcing applicable rules with respect to any firm which is a member of more than one self-regulatory organization.

Statutory Notes and Related Subsidiaries

Effective Date

of 1975 AmendmentAmendment by Pub. L. 94–29 effective June 4, 1975, see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title.

§78iii Functions of Self-regulatory Organizations