,,ii  #aac? ,,congress  #a/ ,session    
,s4 #agbe  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,novemb] #ai1 #bjac,mr4
 ,vitt] 7= himself1 ,mr4 ,s*um]1 & ,ms4 
,l&rieu7 introduc$ ! foll[+ bill2 :i* 0 
read twice & ref]r$ to ! ,committee on  
,bank+1 ,h\s+1 & ,urban ,affairs  ,a    
,,bill  ,to am5d ! ,securities ,inve/or 
,protection ,act ( #aigj to confirm t a 
cu/om]'s net equity claim is bas$ on !  
cu/om]'s la/ /atem5t & t c]ta9 recov]ies
 are prohibit$1 to *ange h[ tru/ees are 
appo9t$1 & = o!r purposes4  #a4 ,%ort   
title ,?is ,act may be cit$ z ! ,re/or+ 
,ma9 ,/reet ,inve/or ,protection &      
,confid5ce ,act4  #b4 ,securities       
,inve/or ,protection ,act ( #aigj       
am5dm5ts  7a7 ,net equity bas$ on la/   
/atem5t ,section #af7aa7 ( ! ,securities
 ,inve/or ,protection ,act ( #aigj 7#ae 
,u4,s4,c4 #ghlll7#aa77 is am5d$ to read 
z foll[s3  7#aa7 ,net equity  7,a7 ,9   
g5]al ,! t]m net equity means ! doll>   
am\nt ( ! acc\nt or acc\nts ( a cu/om]1 
to be det]m9$ by-- 7i7 calculat+ ! sum  

:i* w\ld h be5 ow$ by ! debtor to su*   
cu/om] if ! debtor _h liquidat$1 by sale
 or pur*ase on ! fil+ date-- 7,i7 all   
securities positions ( su* cu/om] 7o!r  
?an cu/om] "n securities reclaim$ by su*
 cu/om]72 &  7,,ii7 all positions 9     
futures contracts & options on futures  
contracts held 9 a portfolio m>g9+      
acc\nt c>ri$ z a securities acc\nt      
pursuant to a portfolio m>g9+ program   
approv$ by ! ,commission1 includ+ all   
prop]ty collat]aliz+ su* positions1 to !
 ext5t t su* prop]ty is n o!rwise       
includ$ h]e92 m9us  7ii7 any indebt$ness
 ( su* cu/om] to ! debtor on ! fil+     
date2 plus  7iii7 any paym5t by su*     
cu/om] ( su* indebt$ness to ! debtor :i*
 is made ) ! approval ( ! tru/ee & )9   
su* p]iod z ! tru/ee may det]m9e 7b 9 no
 ev5t m ?an sixty days aft] !           
publication ( notice "u section #h7;a774
  7,b7 ,treatm5t ( c]ta9 commodity      
futures contracts ,a claim = a commodity
 futures contract receiv$1 acquir$1 or  
held 9 a portfolio m>g9+ acc\nt pursuant

 to a portfolio m>g9+ program approv$ by
 ! ,commission or a claim = a security  
futures contract1 %all be deem$ to be a 
claim ) respect to su* contract z ( !   
fil+ date1 & su* claim %all be treat$ z 
a claim = ca%4  7,c7 ,treatm5t ( acc\nts
 held by a cu/om] 9 sep>ate capacities  
,9 det]m9+ net equity "u ?is p>agraph1  
acc\nts held by a cu/om] 9 sep>ate      
capacities %all be deem$ to be acc\nts (
 sep>ate cu/om]s4  7,d7 ,reliance on    
f9al cu/om] /atem5t  7i7 ,9 g5]al ,9    
det]m9+ net equity "u ?is p>agraph1 !   
positions1 options1 & contracts ( a     
cu/om] report$ to ! cu/om] z held by !  
debtor1 & any indebt$ness ( ! cu/om] to 
! debtor1 %all be det]m9$ bas$ on-- 7,i7
 ! in=mation conta9$ 9 ! la/ /atem5t    
issu$ by ! debtor to ! cu/om] be=e !    
fil+ date2 &  7,,ii7 any additional     
writt5 confirmations ( ! cu/om]'s       
positions1 options1 contracts1 or       
indebt$ness receiv$ aft] su* la/ /atem5t
 b be=e ! fil+ date4  7ii7 ,exception :5
 debtor's records indicate high] value  

,not)/&+ clause 7i71 if ! books &       
records ( ! debtor indicate t ! net     
value ( a cu/om]'s positions1 options1 &
 contracts report$ to ! cu/om] z held by
 ! debtor1 & any indebt$ness ( ! cu/om] 
to ! debtor1 is great] ?an ! net value (
 ! cu/om] z calculat$ "u clause 7i7 us+ 
! cu/om]'s la/ /atem5t1 !n ! det]m9ation
 ( ! net equity ( ! cu/om] "u ?is       
p>agraph %all be done us+ ! books &     
records ( ! debtor in/ead ( ! cu/om]'s  
la/ /atem5t4  7iii7 ,fraud exception ,! 
provisions ( ?is subp>agraph %all n     
apply to any cu/om] t-- 7,i7 knew !     
debtor 0 involv$ 9 fraudul5t activity ) 
respect to any cu/om] ( ! debtor :i*    
reasonably indicat$ a fraud adv]sely    
affect+ a sub/antial numb] ( cu/om]s2 or
  7,,ii7 0 a p]son t-- 7aa7 01 or 0     
requir$ to be1 regi/]$-- 7,,aa7 z a     
brok] or deal] "u ! ,securities ,ex*ange
 ,act ( #aicd2 or 7,,bb7 z an inve/m5t  
advis] "u ! ,inve/m5t ,advis]s ,act (   
#aidj1 or t w\ld h be5 requir$ to regi/]
 z an inve/m5t advis] "u ! ,inve/m5t    

,advis]s ,act ( #aidj b = section       
#bjc7m7 ( su* ,act2  7bb7 knew1 or1 due 
to ! activities ( su* p]son caus+ su*   
p]son to be describ$ "u item 7aa71 %\ld 
h kn[n1 t ! debtor 0 involv$ 9 fraudul5t
 activity ) respect to any cu/om] ( !   
debtor2 &  7cc7 did n notify ,,sipc1 !  
,commission1 or law en=cem5t p]sonnel t 
! debtor 0 involv$ 9 su* fraudul5t      
activity4  4  7b7 ,allocation ( cu/om]  
prop]ty to cu/om]s ,section #h7;c7 ( !  
,securities ,inve/or ,protection ,act ( 
#aigj 7#ae ,u4,s4,c4 #gh;fff-#b7;c77 is 
am5d$-- 7#a7 9 p>agraph 7#a71 by am5d+  
subp>agraph 7,b7 to read z foll[s3  7,b7
 second1 to cu/om]s ( su* debtor1 z     
describ$ "u p>agraph 7#d72  2 &  7#b7 by
 add+ at ! end ! foll[+3  7#d7          
,allocation ( cu/om] prop]ty to cu/om]s 
7,a7 ,9 g5]al ,allocations ( cu/om]     
prop]ty to cu/om]s "u p>agraph 7#a77;,b7
 %all be made su* t cu/om]s %>e 9 cu/om]
 prop]ty bas$ on a me?odology-- 7i7 bas$
 on ! net equity ( a cu/om]1 z det]m9$  
us+ ! la/ /atem5t issu$ by ! debtor to !

 cu/om] be=e ! fil+ date2  7ii7 det]m9$ 
by ! tru/ee1 9 consultation ) !         
,commission2 &  7iii7 approv$ by ! c\rt4
  7,b7 ,alt]nate me?odology ,if ! tru/ee
 det]m9es t allocat+ cu/om] prop]ty 9   
accordance ) subp>agraph 7,a7 w\ld be   
unfair & inequitable to a sub/antial    
segm5t ( cu/om]s & w\ld n fully s]ve !  
rem$ial purposes ( ?is ,act1 allocations
 ( cu/om] prop]ty to cu/om]s "u p>agraph
 7#a77;,b7 %all be made su* t cu/om]s   
%>e 9 cu/om] prop]ty bas$ on a fair &   
reasonable me?odology1 ) special        
consid]ation = ! typical1               
non-pr(essional inve/or1 t-- 7i7 if !   
tru/ee det]m9es t x is necess>y 9 ord]  
to rea* a fair & reasonable result1 is  
det]m9$ )\t reg>d to section            
#af7aa77;,d72  7ii7 is det]m9$ by !     
tru/ee1 9 consultation ) ! ,commission2 
&  7iii7 is approv$ by ! c\rt4  7,c7    
,public notice & comm5t ,be=e approv+ a 
propos$ me?odology "u subp>agraph       
7,a77ii7 or subp>agraph 7,b77ii71 ! c\rt
 %all-- 7i7 notify cu/om]s & o!r int]e/$

 p>ties t ! c\rt is consid]+ ! propos$  
me?odology2 &  7ii7 provide ! cu/om]s & 
int]e/$ p>ties an opportunity to provide
 comm5ts on ! propos$ me?odology4  4    
7c7 ,prohibition on c]ta9 recov]ies     
7#a7 ,9 g5]al ,section #h ( !           
,securities ,inve/or ,protection ,act ( 
#aigj 7#ae ,u4,s4,c4 #gh;fff-#b7 is     
am5d$ by add+ at ! end ! foll[+ new     
subsection3  7g7 ,prohibition on c]ta9  
recov]ies ,not)/&+ any o!r provision (  
?is ,act1 a tru/ee may n recov] any     
prop]ty transf]r$ by ! debtor to a      
cu/om] be=e ! fil+ date unless1 at ! "t 
( su* transf]1 su* cu/om]-- 7#a7 knew ! 
debtor 0 involv$ 9 fraudul5t activity ) 
respect to any cu/om] ( ! debtor :i*    
reasonably indicat$ a fraud adv]sely    
affect+ a sub/antial numb] ( cu/om]s2 or
  7#b7 0 a p]son t-- 7,a7 01 or 0       
requir$ to be1 regi/]$-- 7i7 z a brok]  
or deal] "u ! ,securities ,ex*ange ,act 
( #aicd2 or  7ii7 z an inve/m5t advis]  
"u ! ,inve/m5t ,advis]s ,act ( #aidj1 or
 t w\ld h be5 requir$ to regi/] z an    

inve/m5t advis] "u ! ,inve/m5t ,advis]s 
,act ( #aidj b = section #bjc7m7 ( su*  
,act2  7,b7 knew1 or1 due to !          
activities ( su* p]son caus+ su* p]son  
to be describ$ "u subp>agraph 7,a71 %\ld
 h kn[n1 t ! debtor 0 involv$ 9         
fraudul5t activity ) respect to any     
cu/om] ( ! debtor2 &  7,c7 did n notify 
,,sipc1 ! ,commission1 or law en=cem5t  
p]sonnel t ! debtor 0 involv$ 9 su*     
fraudul5t activity4  4  7#b7            
,con/ruction ,no?+ 9 ?is ,act1 or !     
am5dm5ts made by ?is ,act1 %all be      
con/ru$ z prohibit+ a tru/ee appo9t$ "u 
! ,securities ,inve/or ,protection ,act 
( #aigj f recov]+ prop]ty transf]r$ by a
 debtor to a p]son :o is n a cu/om] ( ! 
debtor4  7d7 ,appo9tm5t ( tru/ees  7#a7 
,9 g5]al ,section #e7;b77#c7 ( !        
,securities ,inve/or ,protection ,act ( 
#aigj 7#ae ,u4,s4,c4 #gh;eee7b77#c77 is 
am5d$ to read z foll[s3  7#c7 ,appo9tm5t
 ( tru/ee & attorney  7,a7 ,9 g5]al ,if 
! c\rt issues a protective decree "u    
p>agraph 7#a71 su* c\rt %all =?) appo9t1

 z tru/ee = ! liquidation ( ! bus9ess ( 
! debtor & z attorney = ! tru/ee1 su*   
p]sons z ! c\rt det]m9es be/ fit to s]ve
 z tru/ee & z attorney f among ! p]sons 
select$ by ! ,commission pursuant to    
subp>agraph 7,b74 ,! p]sons appo9t$ z   
tru/ee & z attorney = ! tru/ee may be   
associat$ ) ! same firm4  7,b7          
,commission ,c&idates ,! ,commission    
%all ma9ta9 a li/ ( c&idates = !        
position ( tru/ee & attorney = ! tru/ee 
= a debtor 9 a liquidation proce$+s1 &  
%all p]iodically update ! li/1 z        
appropriate4 ,) respect to a debtor & ^u
 ! c\rt issu+ a protective decree "u    
p>agraph 7#a71 ! ,commission %all =?)   
provide ! c\rt ) su* li/4  7,c7         
,dis9t]e/ requirem5t ,no p]son may be   
appo9t$ to s]ve z tru/ee or attorney = !
 tru/ee if su* p]son is n dis9t]e/$ )9 !
 mean+ ( p>agraph 7#f71 except t = any  
specifi$ purpose o!r ?an to repres5t a  
tru/ee 9 conduct+ a liquidation proce$+1
 ! tru/ee may1 ) ! approval ( ,,sipc & !
 c\rt1 employ an attorney :o is n       

dis9t]e/$4  7,d7 ,qualification ,a      
tru/ee appo9t$ "u ?is p>agraph %all     
qualify by fil+ a bond 9 ! mann]        
prescrib$ by section #cbb ( title #aa1  
,unit$ ,/ates ,code1 except t nei!r     
,,sipc nor any employee ( ,,sipc %all be
 requir$ to file a bond :5 appo9t$ z    
tru/ee4  7,e7 ,prohibition on tru/ee    
s]v+ 9 multiple liquidations ,a tru/ee  
may n be appo9t$ "u ?is p>agraph if !   
tru/ee is curr5tly s]v+ z tru/ee = !    
liquidation ( ! bus9ess ( ano!r debtor  
"u ?is ,act4  4  7#b7 ,comp5sation =    
tru/ee & attorney ,section #e7;b77#e7 ( 
! ,securities ,inve/or ,protection ,act 
( #aigj 7#ae ,u4,s4,c4 #gh;eee7b77#e77  
is am5d$-- 7,a7 9 subp>agraph 7,a71 by  
add+ at ! end ! foll[+3 ,! c\rt %all    
publicly disclose all su* all[ances t   
are grant$42  7,b7 by am5d+ subp>agraph 
7,c7 to read z foll[s3  7,c7 ,aw>d+ (   
all[ances ,:5ev] an application =       
all[ances is fil$ pursuant to           
subp>agraph 7,b71 ! c\rt %all det]m9e ! 
am\nt ( all[ances1 giv+ due consid]ation

 to ! nature1 ext5t1 & value ( ! s]vices
 r5d]$4  2 &  7,c7 by add+ at ! end !   
foll[+3  7,f7 ,,sipc disclosures ,,sipc 
%all issue qu>t]ly public reports on--  
7i7 all paym5ts made by ,,sipc to !     
tru/ee2  7ii7 all o!r co/s 9 connection 
) ! liquidation proce$+1 includ+ legal &
 acc\nt+ co/s2 &  7iii7 all additional  
exp5ses incurr$ by ,,sipc1 & ! nature ( 
su* exp5ses4  4  7#c7 ,effective date ,!
 am5dm5t made ?is subsection %all take  
effect ) respect to tru/ees & attorneys 
appo9t$ aft] ! date ( ! enactm5t ( ?is  
,act4  7e7 ,def9ition ( cu/om] /atus    
,section #af7b77;,b7 ( ! ,securities    
,inve/or ,protection ,act ( #aigj 7#ae  
,u4,s4,c4 #ghlll7#b77;,b77 is am5d$--   
7#a7 9 clause 7ii71 by /rik+ 82 &0 &    
ins]t+ a semicolon2  7#b7 9 clause      
7iii71 by /rik+ ! p]iod at ! end &      
ins]t+ a semicolon2 &  7#c7 by add+ at !
 end ! foll[+ new clauses3  7iv7 any    
p]son t _h ca% or securities t 7 conv]t$
 or o!rwise misappropriat$ by ! debtor  
7or any p]son :o controls1 is controll$ 

by1 or is "u common control ) ! debtor1 
if su* p]son 0 op]at+ ?r\gh ! debtor71  
irrespective ( :e!r ! debtor held or    
o!rwise _h cu/ody1 possession1 or       
control ( su* ca% or securities2 &  7v7 
any o!r p]son t ! ,commission1 9 its    
discretion & )\t any ne$ = c\rt         
approval1 deems a cu/om] ( ! debtor4  4 
7f7 ,det]m9ation ( ne$ ( protection     
,section #e ( ! ,securities ,inve/or    
,protection ,act ( #aigj 7#ae ,u4,s4,c4 
#gh;eee7 is am5d$-- 7#a7 9 subsection   
7a77#c7-- 7,a7 by am5d+ ! head+ = su*   
p>agraph by ins]t+ ! ,commission or be=e
 sipc2  7,b7 9 ! fir/ subp>agraph 7,a7--
 7i7 by ins]t+ ,! ,commission or be=e   
,,sipc may2 &  7ii7 by ins]t+ !         
,commission or be=e ,,sipc det]m9es2 &  
7,c7 by r$esignat+ ! second subp>agraph 
7,a7 & ! fir/ subp>agraph 7,b7 z clauses
 7i7 & 7ii71 respectively1 & mov+ su*   
clauses #b ems to ! "r2 &  7#b7 9       
subsection 7b77#a71 by /rik+ application
 by ,,sipc & ins]t+ application by !    
,commission or ,,sipc4  7g7 ,tim+ (     

,,sipc advances2 ,result ( delay        
,section #i ( ! ,securities ,inve/or    
,protection ,act ( #aigj 7#ae ,u4,s4,c4 
#gh;fff-#c7 is am5d$ by add+ at ! end ! 
foll[+3  7f7 ,tim+ ( ,,sipc advances2   
,result ( delay  7#a7 ,9 g5]al ,,sipc   
advances made to satisfy cu/om] claims  
pursuant to subsection 7a7 %all be made 
be=e ! end ( ! #c-mon? p]iod beg9n+ on !
 date t is ! end ( ! #f-mon? p]iod      
describ$ "u section #h7;a77#c71 plus !  
am\nt ( any ext5sion grant$ "u su*      
p>agraph4  7#b7 ,result ( delay ,if     
,,sipc fails to make advances to !      
tru/ee 9 ! p]iod specifi$ 9 p>agraph    
7#a71 !n = purposes ( calculat+ a       
cu/om]'s net equity "u ?is ,act1 int]e/ 
%all accrue beg9n+ on ! date t is ! end 
( ! #c-mon? p]iod specifi$ 9 p>agraph   
7#a74  7#c7 ,c\rt det]m9ation ,if !     
tru/ee det]m9es t en\gh in=mation has   
be5 provid$ to ,,sipc to make an advance
 pursuant to subsection 7a71 ! tru/ee   
may petition ! c\rt to h ! c\rt direct  
,,sipc to make su* advance4  4  7h7     

,tim+ ( paym5ts to cu/om]s ,section     
#h7;b7 ( ! ,securities ,inve/or         
,protection ,act ( #aigj 7#ae ,u4,s4,c4 
#gh;fff-#b7;b77 is am5d$-- 7#a7 9       
p>agraph 7#a71 by /rik+ & at ! end2     
7#b7 9 p>agraph 7#b71 by /rik+ ! p]iod  
at ! end & ins]t+ a semicolon2 &  7#c7  
by ins]t+ aft] p>agraph 7#b7 ! foll[+3  
7#c7 ^u petition by a cu/om]1 ord] !    
tru/ee to c>ry out ! obligations ( !    
tru/ee "u ?is subsection ) respect to   
su* cu/om]2 &  7#d7 if ! c\rt det]m9es t
 ! tru/ee has improp]ly delay$ c>ry+ out
 ! obligations ( ! tru/ee "u ?is        
subsection1 impose f9ancial sanctions on
 ! tru/ee4  4  7i7 ,commission au?ority 
,to require ,,sipc action ,section      
#aa7;b7 ( ! ,securities ,inve/or        
,protection ,act ( #aigj 7#ae ,u4,s4,c4 
#gh;ggg7b77 is am5d$ to read z foll[s3  
7b7 ,commission au?ority ,to require    
,,sipc action ,9 ! ev5t ( ! refusal (   
,,sipc to commit its funds or o!rwise to
 act = ! protection ( cu/om]s ( any     
memb] ( ,,sipc1 ! ,commission may       

require ,,sipc to dis*>ge its           
obligations "u ?is ,act )\t c\rt        
approval4  4  7j7 ,limitation on ,,sec  
loans to ,,sipc ,section #d7;g7 ( !     
,securities ,inve/or ,protection ,act ( 
#aigj 7#ae ,u4,s4,c4 #gh;ddd7g77 is     
am5d$ by ins]t+ aft] ?is ,act ! foll[+3 
& ! ,commission1 9 consultation ) !     
,secret>y ( ! ,treasury1 det]m9es t     
,,sipc is unable to borr[ 9 ! public    
debt m>kets at reasonable t]ms 7bo? z to
 yield & maturity74  7k7 ,inspection (  
,,sipc memb]s by ,,sec &                
self-,regulatory organizations  7#a7 ,9 
g5]al ,! ,securities ,inve/or           
,protection ,act ( #aigj 7#ae ,u4,s4,c4 
#gh;aaa et seq47 is am5d$-- 7,a7 9      
section #aa1 by add+ at ! end ! foll[+3 
7e7 ,inspection ( ,,sipc memb]s by ,,sec
 ,! ,commission %all c>ry out p]iodic   
inspections ( ,,sipc memb]s to ensure t 
! in=mation su* memb]s provide to       
cu/om]s1 includ+ in=mation conta9$ 9    
acc\nt /atem5ts & transaction           
confirmations1 is accurate4  2 &  7,b7 9

 section #ac7;c7-- 7i7 by r$esignat+    
p>agraphs 7#a7 & 7#b7 z subp>agraphs    
7,a7 & 7,b71 respectively1 & mov+ su*   
subp>agraphs #b ems to ! "r2  7ii7 by   
/rik+ ,! self-regulatory organization & 
ins]t+ ! foll[+3  7#a7 ,9 g5]al ,!      
self-regulatory organization  2 &  7iii7
 by add+ at ! end ! foll[+3  7#b7       
,inspection ( in=mation provid$ to      
cu/om]s ,"u su* regulations z !         
,commission may prescribe1 !            
self-regulatory organization ( :i* a    
memb] ( ,,sipc is a memb] or 9 :i* x is 
a p>ticipant %all inspect or exam9e su* 
memb] to-- 7,a7 assess ! f9ancial       
/ability ( su* memb]2 &  7,b7 ensure t !
 in=mation su* memb] provides to        
cu/om]s1 includ+ in=mation conta9$ 9    
acc\nt /atem5ts & transaction           
confirmations1 is accurate4  4  7#b7    
,report ,n lat] ?an ! end ( ! #a-ye>    
p]iod beg9n+ on ! date ( ! enactm5t (   
?is ,act1 ! ,securities & ,ex*ange      
,commission %all issue a report to !    
,committee on ,f9ancial ,s]vices ( !    

,h\se ( ,repres5tatives & ! ,committee  
on ,bank+1 ,h\s+1 & ,urban ,affairs ( ! 
,s5ate on ! implem5tation ( ! am5dm5ts  
made by ?is subsection4  #c4 ,effective 
date ,except z provid$ "u section       
#b7;d77#c71 ! am5dm5ts made by section  
#b %all take effect ) respect to a      
liquidation proce$+ "u ! ,securities    
,inve/or ,protection ,act ( #aigj t--   
7#a7 0 9 progress on ! date ( ! enactm5t
 ( ?is ,act2 or  7#b7 is initiat$ aft] !
 date ( ! enactm5t ( ?is ,act4