§ 78eee TITLE 15—COMMERCE AND TRADE Page 454

CODIFICATION (2) Action by self-regulatory organization In subsec. (h), ‘‘chapter 31 of title 31’’ and ‘‘that chap- If a self-regulatory organization has given ter’’ substituted for ‘‘the Second Liberty Bond Act, as notice to SIPC pursuant to subsection (a)(1) amended’’ and ‘‘that Act, as amended,’’, respectively, with respect to a broker or dealer, and such on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 broker or dealer undertakes to liquidate or re- Stat. 1067, the first section of which enacted Title 31, Money and Finance. duce its business either pursuant to the direc- tion of a self-regulatory organization or volun- AMENDMENTS tarily, such self-regulatory organization may 2010—Subsec. (d)(1)(C). Pub. L. 111–203, § 929V(a), sub- render such assistance or oversight to such stituted ‘‘0.02 percent of the gross revenues from the se- broker or dealer as it considers appropriate to curities business of such member of SIPC’’ for ‘‘$150 per protect the interests of customers of such annum’’. broker or dealer. The assistance or oversight Subsec. (h). Pub. L. 111–203, § 929C, substituted by a self-regulatory organization shall not be ‘‘$2,500,000,000’’ for ‘‘$1,000,000,000’’ in first sentence. 1978—Subsec. (a). Pub. L. 95–283, § 6(a), in par. (2) sub- deemed the assumption or adoption by such stituted ‘‘Except as otherwise provided in this section, self-regulatory organization of any obligation the’’ for ‘‘The’’, in par. (2)(C) inserted provisions for in- or liability to customers, other , applicability to other lines of credit, and added par. (4). shareholders, or partners of the broker or Subsec. (c). Pub. L. 95–283, § 6(b), in par. (2) struck out dealer, and shall not prevent or act as a bar to ‘‘or rule’’ after ‘‘bylaw’’, and in par. (3) struck out ref- any action by SIPC. erence to section 78ccc(f) of this title in introductory text and ‘‘or rule’’ after ‘‘bylaw’’ in subpar. (B). (3) Action by SIPC Subsec. (d)(1)(C). Pub. L. 95–283, § 6(c), added subpar. (C). (A) In general Subsec. (e). Pub. L. 95–283, § 6(d), in par. (2) sub- SIPC may, upon notice to a member of stituted ‘‘be recoverable only against future payments SIPC, file an application for a protective de- by such member, except as otherwise provided by SIPC cree with any court of competent jurisdic- bylaw’’ for ‘‘not be recoverable except against future tion specified in section 78u(e) or 78aa of this payments by such member in accordance with a bylaw or rule of SIPC’’, and in par. (3) substituted provisions title, except that no such application shall authorizing interest and penalty charges to be imposed be filed with respect to a member, the only by SIPC bylaw and amount of penalty charge, for provi- customers of which are persons whose claims sions authorizing interest to be imposed by SIPC bylaw could not be satisfied by SIPC advances pur- or rule. suant to section 78fff–3 of this title, if SIPC Subsec. (f). Pub. L. 95–283, § 6(e), struck out ‘‘examin- determines that— ing authority as’’ before ‘‘collection agent for SIPC, (A) 1 the member (including any person shall immediately be subject’’. Subsec. (g). Pub. L. 95–283, § 6(f), redesignated cls. (A) who was a member within one hundred to (C) as (1) to (3), respectively, and, as so redesignated, eighty days prior to such determination) has in cl. (2) struck out applicability to a member of a na- failed or is in danger of failing to meet its tional securities exchange and in cl. (3) substituted pro- obligations to customers; and visions relating to exemptions by rule of transactions (B) 2 one or more of the conditions speci- in the over-the-counter market or on any national se- fied in subsection (b)(1) exist with respect to curities exchange, for provisions relating to exemp- such member. tions by rules and regulations of transactions in the over-the-counter market, and inserted provisions au- (B) Consent required thorizing the collection of fees by such other persons as No member of SIPC that has a customer designated by the Commission by rule for such purpose, and provisions relating to limits on manner of payment may enter into an , , of fees. or proceeding, under Federal or Subsec. (i). Pub. L. 95–283, § 6(g), substituted ‘‘Consoli- State law, without the specific consent of dated group’’ for ‘‘ ‘Gross revenues’ defined’’ in heading, SIPC, except as provided in title II of the redesignated par. (2) as entire section and, as so redes- Dodd-Frank Wall Street Reform and Con- ignated, substituted provisions relating to computa- sumer Protection Act [12 U.S.C. 5381 et seq.]. tions by a member, for provisions relating to computa- tions by a broker or dealer. Pars. (1) and (3), which gen- (4) Effect of other pending actions erally defined term ‘‘gross revenues’’ and authorized An application with respect to a member of the SIPC to define all other terms used in this subsec., respectively, were struck out. SIPC filed with a court under paragraph (3)— (A) may, with the consent of the Commis- EFFECTIVE DATE OF 2010 AMENDMENT sion, be combined with any action brought Amendment by Pub. L. 111–203 effective 1 day after by the Commission, including an action by July 21, 2010, except as otherwise provided, see section the Commission for a temporary receiver 4 of Pub. L. 111–203, set out as an Effective Date note pending an appointment of a trustee under under section 5301 of Title 12, Banks and Banking. subsection (b)(3); and § 78eee. Protection of customers (B) may be filed notwithstanding the pend- ency in the same or any other court of any (a) Determination of need of protection bankruptcy, mortgage foreclosure, or equity (1) Notice to SIPC receivership proceeding or any proceeding to If the Commission or any self-regulatory or- reorganize, conserve, or liquidate such mem- ganization is aware of facts which lead it to ber or its property, or any proceeding to en- believe that any broker or dealer subject to its force a against property of such mem- regulation is in or is approaching financial dif- ber. ficulty, it shall immediately notify SIPC, and, if such notification is by a self-regulatory or- 1 So in original. Probably should be ‘‘(i)’’. ganization, the Commission. 2 So in original. Probably should be ‘‘(ii)’’. Page 455 TITLE 15—COMMERCE AND TRADE § 78eee

(b) Court action (ii) may stay any proceeding to enforce a (1) Issuance of protective decree lien against property of the or any other suit against the debtor, including a Upon receipt of an application by SIPC suit by stockholders of the debtor which under subsection (a)(3), the court shall forth- interferes with prosecution by the trustee with issue a protective decree if the debtor of claims against former directors, offi- consents thereto, if the debtor fails to contest cers, or employees of the debtor, and may such application, or if the court finds that continue such stay upon appointment of a such debtor— trustee pursuant to paragraph (3); (A) is insolvent within the meaning of sec- (iii) may stay enforcement of, and upon tion 101 of title 11, or is unable to meet its appointment of a trustee pursuant to para- obligations as they mature; graph (3), may continue the stay for such (B) is the subject of a proceeding pending period of time as may be appropriate, but in any court or before any agency of the shall not abrogate any right of setoff, ex- United States or any State in which a re- cept to the extent such right may be af- ceiver, trustee, or for such debtor fected under section 553 of title 11, and has been appointed; shall not abrogate the right to enforce a (C) is not in compliance with applicable re- valid, nonpreferential lien or pledge quirements under the 1934 Act [15 U.S.C. 78a against the property of the debtor; and et seq.] or rules of the Commission or any (iv) may appoint a temporary receiver. self-regulatory organization with respect to (C) Exception from stay financial responsibility or hypothecation of (i) Notwithstanding section 362 of title 11, customers’ securities; or neither the filing of an application under (D) is unable to make such computations subsection (a)(3) nor any order or decree ob- as may be necessary to establish compliance tained by SIPC from the court shall operate with such financial responsibility or hypo- as a stay of any contractual rights of a cred- thecation rules. itor to liquidate, terminate, or accelerate a Unless the debtor consents to the issuance of securities contract, commodity contract, a protective decree, the application shall be forward contract, repurchase agreement, heard three business days after the date on swap agreement, or master netting agree- which it is filed, or at such other time as the ment, as those terms are defined in sections court shall determine, taking into consider- 101, 741, and 761 of title 11, to offset or net ation the urgency which the circumstances re- termination values, payment amounts, or quire. other transfer obligations arising under or in connection with one or more of such con- (2) Jurisdiction and powers of court tracts or agreements, or to foreclose on any (A) Exclusive jurisdiction cash collateral pledged by the debtor, wheth- Upon the filing of an application with a er or not with respect to one or more of such court for a protective decree with respect to contracts or agreements. a debtor, such court— (ii) Notwithstanding clause (i), such appli- (i) shall have exclusive jurisdiction of cation, order, or decree may operate as a such debtor and its property wherever lo- stay of the foreclosure on, or disposition of, cated (including property located outside securities collateral pledged by the debtor, the territorial limits of such court and whether or not with respect to one or more property held by any other person as secu- of such contracts or agreements, securities sold by the debtor under a repurchase agree- rity for a debt or subject to a lien); ment, or securities lent under a securities (ii) shall have exclusive jurisdiction of lending agreement. any suit against the trustee with respect (iii) As used in this subparagraph, the term to a proceeding; and ‘‘contractual right’’ includes a right set (iii) except as inconsistent with the pro- forth in a rule or bylaw of a derivatives visions of this chapter, shall have the ju- clearing organization (as defined in the Com- risdiction, powers, and duties conferred modity Exchange Act [7 U.S.C. 1 et seq.]), a upon a court of the United States having multilateral clearing organization (as de- jurisdiction over cases under title 11, to- fined in the Federal Deposit Insurance Cor- gether with such other jurisdiction, pow- poration Improvement Act of 1991), a na- ers, and duties as are prescribed by this tional securities exchange, a national securi- chapter. ties association, a securities clearing agen- (B) Stay of pending actions cy, a contract market designated under the Pending the issuance of a protective de- Commodity Exchange Act, a derivatives cree under paragraph (1), the court with transaction execution facility registered which an application has been filed— under the Commodity Exchange Act, or a (i) shall stay any pending bankruptcy, board of trade (as defined in the Commodity mortgage foreclosure, equity receivership, Exchange Act), or in a resolution of the gov- or other proceeding to reorganize, con- erning board thereof, and a right, whether or serve, or liquidate the debtor or its prop- not in writing, arising under common law, erty and any other suit against any re- under law merchant, or by reason of normal ceiver, conservator, or trustee of the debt- business practice. or or its property, and shall continue such (3) Appointment of trustee and attorney stay upon appointment of a trustee pursu- If the court issues a protective decree under ant to paragraph (3); paragraph (1), such court shall forthwith ap- § 78eee TITLE 15—COMMERCE AND TRADE Page 456

point, as trustee for the liquidation of the other persons as the court may designate, business of the debtor and as attorney for the except that notice need not be given to cus- trustee, such persons as SIPC, in its sole dis- tomers whose claims have been or will be cretion, specifies. The persons appointed as satisfied in full or to creditors who cannot trustee and as attorney for the trustee may be reasonably be expected to receive any dis- associated with the same firm. SIPC may, in tribution during the course of the liquida- its sole discretion, specify itself or one of its tion proceeding. employees as trustee in any case in which (C) Recommendations of SIPC and awarding SIPC has determined that the liabilities of the of allowances debtor to unsecured general creditors and to Whenever an application for allowances is subordinated lenders appear to aggregate less filed pursuant to subparagraph (B), SIPC than $750,000 and that there appear to be fewer shall file its recommendation with respect than five hundred customers of such debtor. to such allowances with the court prior to No person may be appointed to serve as trust- the hearing on such application and shall, if ee or attorney for the trustee if such person is it so requests, be allowed a reasonable time not disinterested within the meaning of para- after such hearing within which to file a fur- graph (6), except that for any specified purpose ther recommendation. In any case in which other than to represent a trustee in conduct- such allowances are to be paid by SIPC with- ing a liquidation proceeding, the trustee may, out reasonable expectation of recoupment with the approval of SIPC and the court, em- thereof as provided in this chapter and there ploy an attorney who is not disinterested. A is no difference between the amounts re- trustee appointed under this paragraph shall quested and the amounts recommended by qualify by filing a bond in the manner pre- SIPC, the court shall award the amounts scribed by section 322 of title 11, except that recommended by SIPC. In determining the neither SIPC nor any employee of SIPC shall amount of allowances in all other cases, the be required to file a bond when appointed as court shall give due consideration to the na- trustee. ture, extent, and value of the services ren- (4) Removal to bankruptcy court dered, and shall place considerable reliance Upon the issuance of a protective decree and on the recommendation of SIPC. appointment of a trustee, or a trustee and (D) Applicable restrictions counsel, under this section, the court shall The restrictions on sharing of compensa- forthwith order the removal of the entire liq- tion set forth in section 504 of title 11 shall uidation proceeding to the court of the United apply to allowances. States in the same judicial district having ju- risdiction over cases under title 11. The latter (E) Charge against estate court shall thereupon have all of the jurisdic- Allowances granted by the court, including tion, powers, and duties conferred by this interim allowances, shall be charged against chapter upon the court to which application the general estate of the debtor as a cost and for the issuance of the protective decree was expense of . If the general es- made. tate is insufficient to pay allowances in (5) Compensation for services and reimburse- whole or in part, SIPC shall advance such ment of expenses funds as are necessary for such payment. (A) Allowances in general (6) Disinterestedness The court shall grant reasonable com- (A) Standards pensation for services rendered and reim- For purposes of paragraph (3), a person bursement for proper costs and expenses in- shall not be deemed disinterested if— curred (hereinafter in this paragraph re- (i) such person is a (including a ferred to as ‘‘allowances’’) by a trustee, and customer), stockholder, or partner of the by the attorney for such a trustee, in con- debtor; nection with a liquidation proceeding. No al- (ii) such person is or was an underwriter lowances (other than reimbursement for of any of the outstanding securities of the proper costs and expenses incurred) shall be debtor or within five years prior to the fil- granted to SIPC or any employee of SIPC for ing date was the underwriter of any securi- serving as trustee. Allowances may be grant- ties of the debtor; ed on an interim basis during the course of (iii) such person is, or was within two the liquidation proceeding at such times and years prior to the filing date, a director, in such amounts as the court considers ap- partner, officer, or employee of the debtor propriate. or such an underwriter, or an attorney for (B) Application for allowances the debtor or such an underwriter; or Any person seeking allowances shall file (iv) it appears that such person has, by with the court an application which com- reason of any other direct or indirect rela- plies in form and content with the provisions tionship to, connection with, or interest in of title 11 governing applications for allow- the debtor or such an underwriter, or for ances under such title. A copy of such appli- any other reason, an interest materially cation shall be served upon SIPC when filed. adverse to the interests of any class of The court shall fix a time for a hearing on creditors (including customers) or stock- such application, and notice of such hearing holders, shall be given to the applicant, the trustee, except that SIPC shall in all cases be the debtor, the creditors, SIPC, and such deemed disinterested, and an employee of Page 457 TITLE 15—COMMERCE AND TRADE § 78eee

SIPC shall be deemed disinterested if such The Federal Deposit Insurance Corporation Improve- employee would, except for his association ment Act of 1991, referred to in subsec. (b)(2)(C)(iii), is with SIPC, meet the standards set forth in Pub. L. 102–242, Dec. 19, 1991, 105 Stat. 2236. For com- plete classification of this Act to the Code, see Short this subparagraph. Title of 1991 Amendment note set out under section 1811 (B) Hearing of Title 12, Banks and Banking, and Tables.

The court shall fix a time for a hearing on AMENDMENTS disinterestedness, to be held promptly after 2010—Subsec. (a)(3). Pub. L. 111–203 designated exist- the appointment of a trustee. Notice of such ing provisions as subpar. (A) relating to general rule, hearing shall be mailed at least ten days inserted heading, substituted ‘‘SIPC may, upon notice prior thereto to each person who, from the to a member of SIPC, file an application for a protec- books and records of the debtor, appears to tive decree with any court of competent jurisdiction have been a customer of the debtor with an specified in section 78u(e) or 78aa of this title, except open account within the past twelve months, that no such application shall be filed with respect to to the address of such person as it appears a member, the only customers of which are persons whose claims could not be satisfied by SIPC advances from the books and records of the debtor, pursuant to section 78fff–3 of this title, if SIPC deter- and to the creditors and stockholders of the mines that—’’ for ‘‘If SIPC determines that—’’, in sub- debtor, to SIPC, and to such other persons as par. (A) relating to failure to meet obligations, sub- the court may designate. The court may, in stituted ‘‘the member’’ for ‘‘any member of SIPC’’, in its discretion, also require that notice be subpar. (B) relating to conditions, substituted period given by publication in such newspaper or for comma at end, added subpar. (B) relating to consent newspapers of general circulation as it may requirement, and struck out concluding provisions designate. At such hearing, at any adjourn- which read as follows: ‘‘SIPC may, upon notice to such member, file an application for a protective decree with ment thereof, or upon application, the court any court of competent jurisdiction specified in section shall hear objections to the retention in of- 78u(e) or 78aa of this title, except that no such applica- fice of a trustee or attorney for a trustee on tion shall be filed with respect to a member the only the grounds that such person is not disin- customers of which are persons whose claims could not terested. be satisfied by SIPC advances pursuant to section 78fff–3 of this title.’’ (c) SEC participation in proceedings 2006—Subsec. (b)(2)(C)(iii). Pub. L. 109–390 inserted ‘‘a The Commission may, on its own motion, file derivatives clearing organization (as defined in the notice of its appearance in any proceeding under Commodity Exchange Act), a multilateral clearing or- this chapter and may thereafter participate as a ganization (as defined in the Federal Deposit Insurance party. Corporation Improvement Act of 1991),’’ after ‘‘rule or bylaw of’’ and substituted ‘‘a securities clearing agen- (d) SIPC participation cy, a contract market designated under the Commodity SIPC shall be deemed to be a party in interest Exchange Act, a derivatives transaction execution fa- as to all matters arising in a liquidation pro- cility registered under the Commodity Exchange Act, ceeding, with the right to be heard on all such or a board of trade (as defined in the Commodity Ex- change Act),’’ for ‘‘or a securities clearing agency, a matters, and shall be deemed to have intervened right set forth in a bylaw of a clearing organization or with respect to all such matters with the same contract market’’. force and effect as if a petition for such purpose 2005—Subsec. (b)(2)(C). Pub. L. 109–8 added subpar. (C). had been allowed by the court. 1978—Subsec. (a). Pub. L. 95–283, § 7(a), added par. (2), redesignated former par. (2) as (3) and, as so redesig- (Pub. L. 91–598, § 5, Dec. 30, 1970, 84 Stat. 1644; nated, revised format of provisions by setting out cls. Pub. L. 95–283, § 7, May 21, 1978, 92 Stat. 254; Pub. (A) and (B) and inserted provisions relating to any per- L. 95–598, title III, § 308(a)–(f), Nov. 6, 1978, 92 son who was a member within 180 days prior to such de- Stat. 2674; Pub. L. 109–8, title IX, § 911, Apr. 20, termination and provisions relating to claims filed 2005, 119 Stat. 185; Pub. L. 109–390, § 5(c), Dec. 12, under section 78fff–3 of this title, and redesignated 2006, 120 Stat. 2698; Pub. L. 111–203, title IX, former par. (3) as (4) and, as so redesignated, sub- stituted ‘‘with respect to a member of SIPC filed with § 929H(b), July 21, 2010, 124 Stat. 1857.) a court under paragraph (3)’’ for ‘‘under paragraph (2)’’ REFERENCES IN TEXT in introductory text and inserted ‘‘may,’’ before ‘‘with the’’ in cl. (A). The Dodd-Frank Wall Street Reform and Consumer Subsec. (b)(1)(A). Pub. L. 95–598, § 308(a)(1), sub- Protection Act, referred to in subsec. (a)(3)(B), is Pub. stituted ‘‘section 101 of title 11’’ for ‘‘the Bankruptcy L. 111–203, July 21, 2010, 124 Stat. 1376. Title II of the Act’’. Act is classified principally to subchapter II (§ 5381 et Subsec. (b)(1)(B) to (E). Pub. L. 95–598, § 308(a)(2), (3), seq.) of chapter 53 of Title 12, Banks and Banking. For redesignated subpars. (C) to (E) as subpars. (B) to (D), complete classification of this Act to the Code, see respectively. Former subpar. (B), which provided for is- Short Title note set out under section 5301 of Title 12 suance of protective decree where court found that and Tables. debtor had committed act of bankruptcy within mean- The 1934 Act, referred to in subsec. (b)(1)(C), means ing of Bankruptcy Act, was struck out. act June 6, 1934, ch. 404, 48 Stat. 881, known as the Secu- Subsec. (b)(2)(A)(iii). Pub. L. 95–598, § 308(b), sub- rities Exchange Act of 1934, which is classified prin- stituted ‘‘the United States having jurisdiction over cipally to chapter 2B (§ 78a et seq.) of this title. For cases under title 11’’ for ‘‘bankruptcy by the Bank- complete classification of this Act to the Code, see sec- ruptcy Act’’. tion 78a of this title and Tables. Subsec. (b)(2)(B)(iii). Pub. L. 95–598, § 308(c), sub- This chapter, referred to in subsecs. (b)(2)(A)(iii), stituted ‘‘any right of setoff, except to the extent such (5)(C), and (c), was in the original ‘‘this Act’’, meaning right may be affected under section 553 of title 11, and Pub. L. 91–598, Dec. 30, 1970, 84 Stat. 1636. For complete shall not abrogate’’ for ‘‘the right of setoff provided in classification of this Act to the Code, see Tables. section 68 of the Bankruptcy Act’’. The Commodity Exchange Act, referred to in subsec. Subsec. (b)(3). Pub. L. 95–598, § 308(d), substituted (b)(2)(C)(iii), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, ‘‘section 322 of title 11’’ for ‘‘the applicable provisions which is classified generally to chapter 1 (§ 1 et seq.) of of the Bankruptcy Act’’. Title 7, Agriculture. For complete classification of this Subsec. (b)(4). Pub. L. 95–598, § 308(e), substituted pro- Act to the Code, see section 1 of Title 7 and Tables. visions relating to removal of proceeding to Bank- § 78fff TITLE 15—COMMERCE AND TRADE Page 458 ruptcy Court for provisions relating to reference of pro- (A) to deliver customer name securities to ceeding to referee in bankruptcy. or on behalf of the customers of the debtor Subsec. (b)(5)(B). Pub. L. 95–598, § 308(f)(1), (2), (5), re- entitled thereto as provided in section designated subpar. (C) as (B) and substituted ‘‘title 11 78fff–2(c)(2) of this title; and governing applications for allowances under such title’’ for ‘‘the Bankruptcy Act governing applications for al- (B) to distribute customer property and (in lowances under such Act’’. Former subpar. (B), which advance thereof or concurrently therewith) covered allowances to a referee in bankruptcy or spe- otherwise satisfy net equity claims of cus- cial master, was struck out. tomers to the extent provided in this sec- Subsec. (b)(5)(C). Pub. L. 95–598, § 308(f)(2), (3), (5), re- tion; designated subpar. (D) as (C) and substituted ‘‘subpara- graph (B)’’ for ‘‘subparagraph (C)’’. Former subpar. (C) (2) to sell or transfer offices and other pro- redesignated (B). ductive units of the business of the debtor; Subsec. (b)(5)(D). Pub. L. 95–598, § 308(f)(2), (4), (5), re- (3) to enforce rights of subrogation as pro- designated subpar. (E) as (D) and substituted ‘‘Section vided in this chapter; and 504 of title 11’’ for ‘‘the Bankruptcy Act’’. Former sub- (4) to liquidate the business of the debtor. par. (D) redesignated (C). Subsec. (b)(5)(E), (F). Pub. L. 95–598, § 308(f)(5), redes- (b) Application of title 11 ignated subpar. (F) as (E). Former subpar. (E) redesig- To the extent consistent with the provisions of nated (D). this chapter, a liquidation proceeding shall be Subsec. (b). Pub. L. 95–283, § 7(b), in par. (1) inserted conducted in accordance with, and as though it ‘‘protective’’ after ‘‘of’’ in heading and substituted pro- were being conducted under chapters 1, 3, and 5 visions relating to issuance of protective decrees, for provisions relating to specific findings necessary for is- and subchapters I and II of chapter 7 of title 11. suance of a decree and uncontested, etc., applications, For the purposes of applying such title in carry- in par. (2) substituted ‘‘Jurisdiction and powers of ing out this section, a reference in such title to court’’ for ‘‘Exclusive jurisdiction over debtor’’ in head- the date of the filing of the petition shall be ing and substituted provisions setting forth jurisdic- deemed to be a reference to the filing date under tion and powers of court with respect to exclusivity of this chapter. such jurisdiction, for provisions relating to exclusive jurisdiction over the debtor, in par. (3) inserted ‘‘and (c) Determination of customer status attorney’’ after ‘‘trustee’’ in heading and substituted In a liquidation proceeding under this chapter, provisions relating to appointment of trustee and at- whenever a person has acted with respect to torney, for provisions relating to appointment of trust- cash or securities with the debtor after the fil- ee, in par. (4) substituted ‘‘Reference to referee in bank- ing date and in a manner which would have ruptcy’’ for ‘‘Debtor and filing date defined’’ in heading and substituted provisions relating to reference to ref- given him the status of a customer with respect eree in bankruptcy, for provisions defining terms to such cash or securities had the action oc- ‘‘debtor’’ and ‘‘filing date’’, and added pars. (5) and (6). curred prior to the filing date, and the trustee is Subsec. (d). Pub. L. 95–283, § 7(c), added subsec. (d). satisfied that such action was taken by the cus- tomer in good faith and prior to the appoint- EFFECTIVE DATE OF 2010 AMENDMENT ment of the trustee, the date on which such ac- Amendment by Pub. L. 111–203 effective 1 day after tion was taken shall be deemed to be the filing July 21, 2010, except as otherwise provided, see section date for purposes of determining the net equity 4 of Pub. L. 111–203, set out as an Effective Date note of such customer with respect to such cash or under section 5301 of Title 12, Banks and Banking. securities. EFFECTIVE DATE OF 2006 AMENDMENT (d) Apportionment Amendment by Pub. L. 109–390 not applicable to any In a liquidation proceeding under this chapter, cases commenced under Title 11, Bankruptcy, or to ap- any cash or securities remaining after the liq- pointments made under any Federal or State law, be- uidation of a lien or pledge made by a debtor fore Dec. 12, 2006, see section 7 of Pub. L. 109–390, set out as a note under section 101 of Title 11. shall be apportioned between his general estate and customer property in the proportion in EFFECTIVE DATE OF 2005 AMENDMENT which the general property of the debtor and the Amendment by Pub. L. 109–8 effective 180 days after cash and securities of the customers of such Apr. 20, 2005, and not applicable with respect to cases debtor contributed to such lien or pledge. Secu- commenced under Title 11, Bankruptcy, before such ef- rities apportioned to the general estate under fective date, except as otherwise provided, see section this subsection shall be subject to the provisions 1501 of Pub. L. 109–8, set out as a note under section 101 of section 78lll(5)(A) of this title. of Title 11. (e) Costs and expenses of administration EFFECTIVE DATE OF 1978 AMENDMENT All costs and expenses of administration of the Amendment by Pub. L. 95–598 effective Oct. 1, 1979, estate of the debtor and of the liquidation pro- see section 402(a) of Pub. L. 95–598, set out as an Effec- ceeding shall be borne by the general estate of tive Date note preceding section 101 of Title 11, Bank- the debtor to the extent it is sufficient therefor, ruptcy. and the priorities of distribution from the gen- § 78fff. General provisions of a liquidation pro- eral estate shall be as provided in section 726 of ceeding title 11. Costs and expenses of administration shall include payments pursuant to section (a) Purposes 78fff–2(e) of this title and section 78fff–3(c)(1) of The purposes of a liquidation proceeding under this title (to the extent such payments recov- this chapter shall be— ered securities which were apportioned to the (1) as promptly as possible after the appoint- general estate pursuant to subsection (d)) and ment of a trustee in such liquidation proceed- costs and expenses of SIPC employees utilized ing, and in accordance with the provisions of by the trustee pursuant to section 78fff–1(a)(2) of this chapter— this title. All funds advanced by SIPC to a trust-