Notice2026-06145
Securities Investor Protection Corporation; Order Approving the Determination of the Board of Directors of the Securities Investor Protection Corporation Not To Adjust for Inflation the Standard Maximum Cash Advance Amount and Notice of the Standard Maximum Cash Advance Amount
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 31, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 61 (Tuesday, March 31, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 61 (Tuesday, March 31, 2026)]
[Notices]
[Pages 16038-16040]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06145]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. SIPA-186; File No. SIPC-2026-01]
Securities Investor Protection Corporation; Order Approving the
Determination of the Board of Directors of the Securities Investor
Protection Corporation Not To Adjust for Inflation the Standard Maximum
Cash Advance Amount and Notice of the Standard Maximum Cash Advance
Amount
March 26, 2026.
I. Background
On January 6, 2026, the Securities Investor Protection Corporation
(``SIPC'') filed with the Securities and Exchange Commission
(``Commission''), under section 3(e)(2)(A) of the Securities Investor
Protection Act of 1970 (``SIPA''),\1\ notification that SIPC's Board of
Directors (the ``SIPC Board'' or the ``Board'') had determined pursuant
to section 9(e)(1) of SIPA \2\ that the standard maximum cash advance
amount available to satisfy customer claims for cash in a SIPA
liquidation proceeding would remain at $250,000 beginning January 1,
2027, and for the five-year period immediately thereafter. The
Commission published for comment notice of the SIPC Board's
determination in the Federal Register on January 21, 2026.\3\ The
Commission did not receive any comments. The Commission today is
approving, by order, the SIPC Board's determination. As required by
SIPA,\4\ the Commission is also publishing notice that the standard
maximum cash advance amount will remain $250,000 beginning January 1,
2027, and for the five-year period immediately thereafter.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78ccc(e)(2)(A).
\2\ 15 U.S.C. 78fff-3(e)(1).
\3\ See Securities Investor Protection Corporation, Release No.
SIPA-185 (Jan. 14, 2026), 91 FR 2579 (Jan. 21, 2026) (File No. SIPC-
2026-01).
\4\ 15 U.S.C. 78fff-3(e)(3)(A).
---------------------------------------------------------------------------
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the
``Dodd-Frank Act'') \5\ amended SIPA to raise the ``standard maximum
cash advance amount'' from $100,000 to $250,000 per customer.\6\ The
amendments to SIPA aligned that amount with the maximum insurance
amount provided by the Federal Deposit Insurance Corporation (``FDIC'')
to customers of a failed bank. The Dodd-Frank Act also amended SIPA to
require the SIPC Board to determine, no later than January 1, 2011, and
every five years thereafter, whether an inflation adjustment to the
standard maximum cash advance amount available to satisfy customer
claims in a SIPA liquation proceeding is appropriate.\7\ Any adjustment
to the standard maximum cash advance amount takes effect on January 1
of the year immediately succeeding the calendar year in which the
adjustment is made.\8\ Under SIPA, the determination by the SIPC Board
to maintain the standard maximum cash advance amount is subject to the
same process of public notice and approval by the Commission as is the
case for SIPC proposed rule changes.\9\ Moreover, the Commission shall
publish notice of the standard maximum cash advance amount in the
Federal Register no later than April 5 of any calendar year in which
SIPC is required to determine whether an inflation adjustment is
appropriate.\10\
---------------------------------------------------------------------------
\5\ Public Law 111-203, 124 Stat. 1376 (July 21, 2010).
\6\ In a liquidation of a broker-dealer performed under SIPA,
where the customer property in the broker-dealer's estate is
insufficient to meet a customer's eligible claim for cash, SIPC
advances up to $250,000 (i.e., the standard maximum cash advance
amount) to the customer to satisfy that claim. See 15 U.S.C. 78fff-
3.
\7\ 15 U.S.C. 78fff-3(e)(1). Most recently, in 2021, the Board
determined to maintain the standard maximum cash advance amount at
$250,000, which was approved by the Commission. See Securities
Investor Protection Corporation, Release No. SIPA-183 (Jan. 27,
2021), 86 FR 7900 (Feb. 2, 2021) and Securities Investor Protection
Corporation, Release No. SIPA-184 (Mar. 25, 2021), 86 FR 16651 (Mar.
30, 2021).
\8\ 15 U.S.C. 78fff-3(e)(4).
\9\ 15 U.S.C. 78fff-3(e)(1) and 15 U.S.C. 78ccc(e)(2).
\10\ 15 U.S.C. 78fff-3(e)(3)(A).
---------------------------------------------------------------------------
II. Determination of the SIPC Board Not To Adjust the Standard Maximum
Cash Advance Amount
As described above, SIPC filed with the Commission notification
that the SIPC Board had determined not to raise the standard maximum
cash advance amount above $250,000, and thereby maintain it at that
level for the five-year period beginning January 1, 2027. In its
filing, SIPC stated that applying the inflation formula prescribed by
SIPA in this instance would have increased the standard maximum cash
advance
[[Page 16039]]
amount by $100,000 (to $350,000) and that the SIPC Board weighed the
factors it considered in making its determination against an increase
of that amount. For the reasons discussed below, the SIPC Board
determined not to make the inflation adjustment.
The SIPC Board is required under SIPA to consider the overall state
of the SIPC Fund \11\ and the economic conditions and the potential
problems affecting members of SIPC.\12\ In considering the overall
state of the SIPC Fund and the economic conditions affecting members of
SIPC, the Board reviewed its historical experience with advances from
the SIPC Fund in past and present liquidation proceedings. In
considering the potential problems affecting SIPC members, the Board
reviewed the current state of the financial markets, technology
advancements that may affect the securities industry, and recent and
pending changes in legislation that may affect the securities industry.
The Board stated that it believed consideration of these statutory
factors did not warrant an inflation adjustment of the standard maximum
cash advance amount.
---------------------------------------------------------------------------
\11\ SIPC is required to establish and administer a broker-
dealer liquidation fund (the ``SIPC Fund'') from which all
expenditures by SIPC are to be made, including funds used to
facilitate the liquidation of broker-dealers. See 15 U.S.C. 78ddd.
\12\ 15 U.S.C. 78fff-3(e)(5).
---------------------------------------------------------------------------
SIPA also requires the SIPC Board to consider such other factors as
the SIPC Board may determine appropriate.\13\ Accordingly, the SIPC
Board considered the current parity between the amount of the SIPC
standard maximum cash advance amount and the ``standard maximum deposit
insurance amount'' under the Federal Deposit Insurance Act (both at
$250,000). SIPC stated that increases to the limit of protection for
cash claims under SIPA historically have moved in lockstep with
increases in FDIC deposit insurance and concluded that an inflation
adjustment to the SIPA standard maximum cash advance amount without a
corresponding adjustment to the FDIC standard maximum deposit insurance
amount would result in an undesirable divergence between the two.
---------------------------------------------------------------------------
\13\ Id.
---------------------------------------------------------------------------
Further, SIPC indicated that the Board considered the relatively
limited benefit that an inflation adjustment would provide to retail
customers, based upon its experience that the number and size of
unsatisfied customer claims of liquidations performed under SIPA has
been relatively limited. The SIPC Board also considered that customer
free credit balances at brokerage firms have not increased over the
last four years despite recent robust inflation during the same period,
as firms have increasingly utilized sweep programs \14\ to move
customer free credit balances from broker-dealers to banks. The Board
also considered that despite the projected increase in the number
securities accounts in the future, that the Board expects average free
credit balances to show a stagnant or declining trend in the future.
The SIPC Board considered views of the staffs of the Commission, the
FDIC, the Financial Industry Regulatory Authority, the Securities
Industry and Financial Markets Association, and the American Securities
Association.
---------------------------------------------------------------------------
\14\ A ``sweep program'' is a service proved by a broker-dealer
where it offers to its customer the option to automatically transfer
free credit balances of cash in the securities account of the
customer to either a money market fund product an account at a bank
whose deposits are insured by the FDIC. See 17 CFR 240.15c3-
3(a)(17).
---------------------------------------------------------------------------
After considering these factors, the SIPC Board concluded that, on
balance, an adjustment to the standard maximum cash advance amount was
not appropriate, and determined that the standard maximum cash advance
amount should remain at $250,000 per customer.
III. Discussion and Commission Order
Under SIPA, the determination by the SIPC Board to maintain the
standard maximum cash advance amount is subject to the same process for
the public notice and approval of SIPC proposed rule changes.\15\ SIPA
provides that within thirty-five days of the date of publication of the
notice of filing of a proposed SIPC rule change in the Federal
Register, or within such longer period ``as the Commission may
designate of not more than ninety days after such date if it finds such
longer period to be appropriate and publishes its reasons for so
finding or as to which SIPC consents'', the Commission shall either
approve such proposed rule change, or institute proceedings to
determine whether such proposed rule change should be disapproved.\16\
SIPC consented to extending the period for the Commission to approve
SIPC's determination in this matter until March 31, 2026.\17\ Further,
SIPA provides that the Commission shall approve a proposed rule change
if it finds that the proposed rule change is in the public interest and
is consistent with the purposes of SIPA.\18\
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78fff-3(e)(1) and 15 U.S.C. 78ccc(e)(2)(A).
\16\ 15 U.S.C. 78ccc(e)(2)(B).
\17\ See Letter from Hemant Sharma, Deputy General Counsel,
SIPC, dated February 17, 2026.
\18\ 15 U.S.C. 78ccc(e)(2)(D).
---------------------------------------------------------------------------
The Commission finds, pursuant to section 3(e)(2)(D) of SIPA, that
the determination of the SIPC Board to refrain from adjusting for
inflation the standard maximum cash advance amount of $250,000
beginning January 1, 2027, and for the five-year period immediately
thereafter is in the public interest and consistent with the purposes
of SIPA. It was reasonable for the Board to examine the effect of past
and current liquidation proceedings on the SIPC Fund and to review the
financial markets, technological advancements and legislative
developments when considering the statutorily-required factors (the
overall state of the SIPC Fund, the economic conditions affecting
members of SIPC, and the potential problems affecting SIPC members).
Maintaining parity between the standard maximum cash advance amount
and the maximum amount of insurance provided by the FDIC is in the
public interest and consistent with the purposes of SIPA. Providing a
higher level of SIPA coverage for cash deposits of broker-dealer
customers compared to FDIC-insured bank depositors could incentivize
individuals to deposit cash at broker-dealers to maximize deposit
protection rather than for investment purposes. This practice could
raise questions about whether such deposits would be covered under
SIPA, which provides ``customer'' status to those who have deposited
cash with a SIPC member for the purpose of purchasing securities.\19\
Keeping the SIPC standard maximum cash advance amount on parity with
the maximum FDIC insurance amount, should limit the instances of
individuals using brokerage accounts to hold cash for purposes other
than for purchasing securities, which should minimize the instances of
such deposits not being covered in liquidations performed under SIPA.
---------------------------------------------------------------------------
\19\ See 15 U.S.C. 78lll(2)(B)(i).
---------------------------------------------------------------------------
In addition, the SIPC Board's consideration of its historical
experience with advances being generally sufficient to fulfil the cash
claims of customers in SIPA liquidation was reasonable. For example,
the total value of unsatisfied portion of eligible customer cash claims
for the first 54 years of SIPC history amount to only approximately $25
million. The Board's consideration of recent trends in stable to
declining levels of customer credit balances at broker-dealers, in part
due to the increasing practice of ``sweeping'' customer cash from
broker-dealer accounts to bank accounts, was appropriate. Moreover, not
raising the standard maximum cash advance
[[Page 16040]]
amount should minimize the potential for unnecessary increases to
assessments on members.
It is therefore ordered, pursuant to section 3(e)(2) of SIPA, that
the determination by the SIPC Board that the standard maximum cash
advance amount will remain at $250,000 beginning January 1, 2027, and
for the five-year period immediately thereafter, be and hereby is
approved.
IV. Notice of the Standard Maximum Cash Advance Amount
Section 9(e)(3)(A) of SIPA requires that the Commission publish the
standard maximum cash advance amount in the Federal Register no later
than April 5 of any calendar year in which SIPC is required to
determine whether an inflation adjustment is appropriate.\20\
Accordingly, the Commission is hereby providing notice that the
standard maximum cash advance amount is $250,000 beginning January 1,
2027, and for the five-year period immediately thereafter.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78fff-3(e)(3)(A).
By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-06145 Filed 3-30-26; 8:45 am]
BILLING CODE 8011-01-P
</pre></body>
</html>Indexed from Federal Register on March 31, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.