Brokers Face Higher SIPC Fees if Congress Expands SIPC Coverage

Discussion in 'Wall St. News' started by Options12, Mar 11, 2012.

  1. Options12

    Options12 Guest

    Mr. Gallagher said that brokers could be on the hook for substantial costs if SIPC's mandate is broadened. For instance, if a broker is held responsible for the actions of a “rogue distribution firm” that commits massive fraud, “then the costs are going to be pretty high,” he said.

    “I want clarity for investors,” Mr. Gallagher said. “I want clarity for brokerage firms, too. They don't know what their liability is [as] a SIPC member.”
  2. I have no problem paying a small SIPC fee once a year to get them to cover everything and raise the limits.
  3. Options12

    Options12 Guest

    opt789, I think most investors would agree with you. The brokers, however, are actively fighting against additional assessments.


    In the short-term it would help if brokers started adding a code to customer positions in order to identify what exactly is covered by SIPC. This idea was recommended by an SEC OIG report last year.

    The OIEA Director also indicated that given today’s technology, broker-dealers could identify the assets that are not covered by SIPC in the account statements that are sent to customers.