,i  #aad? ,,congress  #b;d ,session  ,h4
 ,r4 #eheb  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,july #ad1 #bjaf,mr4  
,luetkemey] 7= himself1 ,mr4 ,sessions1 
& ,mrs4 ,c>olyn ,b4 ,maloney ( ,new     
,york7 introduc$ ! foll[+ bill2 :i* 0   
ref]r$ to ! ,committee on ,f9ancial     
,s]vices  ,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$1 to  
provide ! ,securities & ,ex*ange        
,commission ) ov]sight ( ! ,securities  
,inve/or ,protection ,corporation1 & =  
o!r purposes4  #a4 ,securities ,inve/or 
,protection ,act ( #aigj am5dm5ts  7a7  
,net equity bas$ 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 ,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 
7e7 ,commission ov]sight ( ,,sipc       
,section #c ( ! ,securities ,inve/or    
,protection ,act ( #aigj 7#ae ,u4,s4,c4 
#gh;ccc7 is am5d$ by add+ at ! end !    
foll[+3  7f7 ,commission ov]sight (     
,,sipc ,! ,commission may-- 7#a7 direct 
,,sipc to take any action pursuant to   
?is ,act t ! ,commission det]m9es is    
necess>y or appropriate 9 ! public      
int]e/1 = ! protection ( inve/ors1 or   
o!rwise 9 fur!rance ( ! purposes ( ?is  
,act42 &  7#b7 issue or revise any      
regulation "u ?is ,act4  4  7f7 ,fund   

repl5i%m5t ,section #d ( ! ,securities  
,inve/or ,protection ,act ( #aigj 7#ae  
,u4,s4,c4 #gh;ddd7 is am5d$ by add+ at !
 end ! foll[+3  7j7 ,fund repl5i%m5t    
7#a7 ,repl5i%m5t plan ,if ! balance ( ! 
,fund decreases by #ej p]c5t or m dur+ a
 fiscal ye>1 ,,sipc1 9 consultation ) ! 
,commission1 %all e/abli% & c>ry out a  
fund repl5i%m5t plan1 "u :i* ,,sipc %all
 borr[ 9 ! public debt m>kets on t]ms & 
conditions :i* p]mit debt repaym5ts & ! 
reasonable buildup ( fund res]ves to be 
cov]$ f exi/+ annual assessm5ts4  7#b7  
,transf] ( am\nts ) respect to fraudul5t
 debtors ,if ! ,commission det]m9es t   
paym5ts f ! ,,sipc ,fund w be requir$   
because ! managem5t ( a 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 ! debtor7 committ$ 
fraud1 ! ,commission may transf] am\nts 
f a fund e/abli%$ "u section #cjh ( !   
,s>banes-,oxley ,act ( #bjjb 7#ae       
,u4,s4,c4 #gbdf7 to ! ,,sipc ,fund1 if !
 ,commission det]m9es t su* transf] w-- 

7,a7 enable prompt assi/ance to cu/om]s 
( ! debtor 7or p]son72 &  7,b7 all[ = ! 
ma9t5ance ( adequate res\rces 9 ! ,,sipc
 ,fund4  4  7g7 ,commission report on   
liquidation proce$+s ,section #aa7;c7 ( 
! ,securities ,inve/or ,protection ,act 
( #aigj 7#ae ,u4,s4,c4 #gh;ggg7c77 is   
am5d$ by add+ at ! end ! foll[+3  7#c7  
,report on liquidation proce$+s ,!      
,commission %all1 aft] ! end ( !        
#ij-;day p]iod beg9n+ on ! date t a     
liquidation proce$+ is comm5c$ "u ?is   
,act1 promptly issue a report to !      
,committee on ,f9ancial ,s]vices ( !    
,h\se ( ,repres5tatives & ! ,committee  
on ,bank+1 ,h\s+1 & ,urban ,affairs ( ! 
,s5ate provid+ ! /atus ( cu/om] claims 9
 su* proce$+1 includ+ am\nts paid "u ?is
 ,act to settle su* claims & ! am\nt (  
out/&+ claims4  4  #b4 ,effective date2 
rule ( application  7a7 ,9 g5]al ,!     
am5dm5ts made by section #a %all take   
effect ) respect to a liquidation       
proce$+ "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  7b7 ,ongo+     
proce$+s ,not)/&+ subsection 7a71 )     
respect to a liquidation proce$+ "u !   
,securities ,inve/or ,protection ,act ( 
#aigj t 0 9 progress on ! date ( !      
enactm5t ( ?is ,act--  7#a7 section     
#h7;c77#d7 ( ! ,securities ,inve/or     
,protection ,act ( #aigj1 z add$ by ?is 
,act1 %all n apply to su* liquidation   
proce$+2 &  7#b7 ! am5dm5ts made by     
section #a %all n apply ) respect to a  
cu/om] involv$ 9 su* proce$+ if ! tru/ee
 9 su* proce$+ det]m9es t ! cu/om]'s    
claims "u ! ,securities ,inve/or        
,protection ,act ( #aigj1 z 9 effect on 
! day be=e ! date ( enactm5t ( ?is ,act1
 h be5 fully satisfi$4  7c7 ,paym5t     
requirem5ts = c]ta9 proce$+s  7#a7 ,9   
g5]al ,! tru/ee ) respect to a          
liquidation proce$+ ( a debtor "u !     
,securities ,inve/or ,protection ,act ( 
#aigj %all make su* deliv]y ( securities
 or paym5t ( am\nts to ! cu/om]s ( !    

debtor z are necess>y to satisfy ! net  
equity claims ( su* cu/om]s be=e ! end (
 ! #fj-;day p]iod beg9n+ on ! date ( !  
enactm5t ( ?is ,act--  7,a7 9 ! case (  
any proce$+ t 0 9 progress on ! date ( !
 enactm5t ( ?is ,act2 &  7,b7 9 ! case (
 any proce$+--  7i7 initiat$ aft] ! date
 ( ! enactm5t ( ?is ,act2 &  7ii7 )     
respect to :i* ! ,securities ,inve/or   
,protection ,corporation _h be5 ask$ to 
initiate a proce$+ aga9/ su* debtor be=e
 ! date ( ! enactm5t ( ?is ,act & _h    
refus$4  7#b7 ,report on failure to     
satisfy claims ,if1 ) respect to a      
proce$+ describ$ "u p>agraph 7#a71 ! net
 equity claims ( ! cu/om]s ( ! debtor 9 
su* proce$+ are n satisfi$ )9 ! #fj-;day
 p]iod requir$ "u su* p>agraph1 !       
,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 expla9+ :y su* claims 7 n        
satisfi$ be=e ! end ( su* p]iod4  7d7   

,def9itions ,= purposes ( ?is section1 !
 t]ms cu/om]1 debtor1 net equity1 &     
security h ! mean+ giv5 ^? t]ms1        
respectively1 "u section #af ( !        
,securities ,inve/or ,protection ,act ( 
#aigj4