15 U.S.C. § 78lll : US Code - Section 78LLL: Definitions

Search 15 U.S.C. § 78lll : US Code - Section 78LLL: Definitions

For purposes of this chapter, including the application of the
Bankruptcy Act to a liquidation proceeding:
(1) Commission
The term "Commission" means the Securities and Exchange
Commission.
(2) Customer
The term "customer" of a debtor means any person (including any
person with whom the debtor deals as principal or agent) who has
a claim on account of securities received, acquired, or held by
the debtor in the ordinary course of its business as a broker or
dealer from or for the securities accounts of such person for
safekeeping, with a view to sale, to cover consummated sales,
pursuant to purchases, as collateral security, or for purposes of
effecting transfer. The term "customer" includes any person who
has a claim against the debtor arising out of sales or
conversions of such securities, and any person who has deposited
cash with the debtor for the purpose of purchasing securities,
but does not include -
(A) any person to the extent that the claim of such person
arises out of transactions with a foreign subsidiary of a
member of SIPC; or
(B) any person to the extent that such person has a claim for
cash or securities which by contract, agreement, or
understanding, or by operation of law, is part of the capital
of the debtor, or is subordinated to the claims of any or all
creditors of the debtor, notwithstanding that some ground
exists for declaring such contract, agreement, or understanding
void or voidable in a suit between the claimant and the debtor.
(3) Customer name securities
The term "customer name securities" means securities which were
held for the account of a customer on the filing date by or on
behalf of the debtor and which on the filing date were registered
in the name of the customer, or were in the process of being so
registered pursuant to instructions from the debtor, but does not
include securities registered in the name of the customer which,
by endorsement or otherwise, were in negotiable form.
(4) Customer property
The term "customer property" means cash and securities (except
customer name securities delivered to the customer) at any time
received, acquired, or held by or for the account of a debtor
from or for the securities accounts of a customer, and the
proceeds of any such property transferred by the debtor,
including property unlawfully converted. The term "customer
property" includes -
(A) securities held as property of the debtor to the extent
that the inability of the debtor to meet its obligations to
customers for their net equity claims based on securities of
the same class and series of an issuer is attributable to the
debtor's noncompliance with the requirements of section
78o(c)(3) of this title and the rules prescribed under such
section;
(B) resources provided through the use or realization of
customers' debit cash balances and other customer-related debit
items as defined by the Commission by rule;
(C) any cash or securities apportioned to customer property
pursuant to section 78fff(d) of this title; and
(D) any other property of the debtor which, upon compliance
with applicable laws, rules, and regulations, would have been
set aside or held for the benefit of customers, unless the
trustee determines that including such property within the
meaning of such term would not significantly increase customer
property.
(5) Debtor
The term "debtor" means a member of SIPC with respect to whom
an application for a protective decree has been filed under
section 78eee(a)(3) of this title or a direct payment procedure
has been instituted under section 78fff-4(b) of this title.
(6) Examining authority
The term "examining authority" means, with respect to any
member of SIPC (A) the self-regulatory organization which
inspects or examines such member of SIPC, or (B) the Commission
if such member of SIPC is not a member of or participant in any
self-regulatory organization or if the Commission has designated
itself examining authority for such member pursuant to section
78iii(c) of this title.
(7) Filing date
The term "filing date" means the date on which an application
for a protective decree is filed under section 78eee(a)(3) of
this title, except that -
(A) if a petition under title 11 concerning the debtor was
filed before such date, the term "filing date" means the date
on which such petition was filed;
(B) if the debtor is the subject of a proceeding pending in
any court or before any agency of the United States or any
State in which a receiver, trustee, or liquidator for such
debtor has been appointed and such proceeding was commenced
before the date on which such application was filed, the term
"filing date" means the date on which such proceeding was
commenced; or
(C) if the debtor is the subject of a direct payment
procedure or was the subject of a direct payment procedure
discontinued by SIPC pursuant to section 78fff-4(f) of this
title, the term "filing date" means the date on which notice of
such direct payment procedure was published under section 78fff-
4(b) of this title.
(8) Foreign subsidiary
The term "foreign subsidiary" means any subsidiary of a member
of SIPC which has its principal place of business in a foreign
country or which is organized under the laws of a foreign
country.
(9) Gross revenues from the securities business
The term "gross revenues from the securities business" means
the sum of (but without duplication) -
(A) commissions earned in connection with transactions in
securities effected for customers as agent (net of commissions
paid to other brokers and dealers in connection with such
transactions) and markups with respect to purchases or sales of
securities as principal;
(B) charges for executing or clearing transactions in
securities for other brokers and dealers;
(C) the net realized gain, if any, from principal
transactions in securities in trading accounts;
(D) the net profit, if any, from the management of or
participation in the underwriting or distribution of
securities;
(E) interest earned on customers' securities accounts;
(F) fees for investment advisory services (except when
rendered to one or more registered investment companies or
insurance company separate accounts) or account supervision
with respect to securities;
(G) fees for the solicitation of proxies with respect to, or
tenders or exchanges of, securities;
(H) income from service charges or other surcharges with
respect to securities;
(I) except as otherwise provided by rule of the Commission,
dividends and interest received on securities in investment
accounts of the broker or dealer;
(J) fees in connection with put, call, and other option
transactions in securities;
(K) commissions earned from transactions in (i) certificates
of deposit, and (ii) Treasury bills, bankers acceptances, or
commercial paper which have a maturity at the time of issuance
of not exceeding nine months, exclusive of days of grace, or
any renewal thereof, the maturity of which is likewise limited,
except that SIPC shall by bylaw include in the aggregate of
gross revenues only an appropriate percentage of such
commissions based on SIPC's loss experience with respect to
such instruments over at least the preceding five years; and
(L) fees and other income from such other categories of the
securities business as SIPC shall provide by bylaw.
Such term does not include revenues received by a broker or
dealer in connection with the distribution of shares of a
registered open end investment company or unit investment trust
or revenues derived by a broker or dealer from the sale of
variable annuities or from the conduct of the business of
insurance.
(10) Liquidation proceeding
The term "liquidation proceeding" means any proceeding for the
liquidation of a debtor under this chapter in which a trustee has
been appointed under section 78eee(b)(3) of this title.
(11) Net equity
The term "net equity" means the dollar amount of the account or
accounts of a customer, to be determined by -
(A) calculating the sum which would have been owed by the
debtor to such customer if the debtor had liquidated, by sale
or purchase on the filing date, all securities positions of
such customer (other than customer name securities reclaimed by
such customer); minus
(B) any indebtedness of such customer to the debtor on the
filing date; plus
(C) any payment by such customer of such indebtedness to the
debtor which is made with the approval of the trustee and
within such period as the trustee may determine (but in no
event more than sixty days after the publication of notice
under section 78fff-2(a) of this title).
In determining net equity under this paragraph, accounts held by
a customer in separate capacities shall be deemed to be accounts
of separate customers.
(12) Persons registered as brokers or dealers
The term "persons registered as brokers or dealers" includes
any person who is a member of a national securities exchange
other than a government securities broker or government
securities dealer registered under section 78o-5(a)(1)(A) of this
title.
(13) Protective decree
The term "protective decree" means a decree, issued by a court
upon application of SIPC under section 78eee(a)(3) of this title,
that the customers of a member of SIPC are in need of the
protection provided under this chapter.
(14) Security
The term "Security" means any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, any collateral trust
certificate, preorganization certificate or subscription,
transferable share, voting trust certificate, certificate of
deposit, certificate of deposit for a security, or any security
future as that term is defined in section 78c(a)(55)(A) of this
title, any investment contract or certificate of interest or
participation in any profit-sharing agreement or in any oil, gas,
or mineral royalty or lease (if such investment contract or
interest is the subject of a registration statement with the
Commission pursuant to the provisions of the Securities Act of
1933 [15 U.S.C. 77a et seq.]), any put, call, straddle, option,
or privilege on any security, or group or index of securities
(including any interest therein or based on the value thereof),
or any put, call, straddle, option, or privilege entered into on
a national securities exchange relating to foreign currency, any
certificate of interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrant or right
to subscribe to or purchase or sell any of the foregoing, and any
other instrument commonly known as a security. Except as
specifically provided above, the term "security" does not include
any currency, or any commodity or related contract or futures
contract, or any warrant or right to subscribe to or purchase or
sell any of the foregoing.