17 C.F.R. §§300.500-300.503 Adopted March, 1988


Rule 500 — General

These rules will be applied in determining whether a securities transaction gives rise to a “claim for cash” or a “claim for securities” on the filing date of either a liquidation proceeding pursuant to the Securities Investor Protection Act (hereinafter referred to as “the Act”) or a direct payment procedure pursuant to section 10 of the Act.

Rule 501 — Claim for Cash

(a) Where a SIPC member (“Debtor”) held securities in an account for a customer, the customer has a “claim for cash” with respect to any authorized securities sale:

(1) if the Debtor has sent written confirmation to the customer that the securities in question have been sold for or purchased from the customer’s account; or

(2) whether or not such a written confirmation has been sent, if the securities in question have become the subject of a completed or executory contract for sale for or purchase from the account.

(b) Where the Debtor held cash in an account for a customer, the customer has a “claim for cash,” notwithstanding the fact that the customer has ordered securities purchased for the account, unless:

(1) the debtor has sent written confirmation to the customer that the securities in question have been purchased for or sold to the customer’s account; or

(2) whether or not such a written confirmation has been sent, if the securities in question have become the subject of a completed or executory contract for purchase for or sale to the account.

Rule 502 — Claim for Securities

(a) Where the Debtor held cash in an account for a customer, the customer has a “claim for securities” with respect to any authorized securities purchase:

(1) if the Debtor has sent written confirmation to the customer that the securities in question have been purchased for or sold to the customer’s account; or

(2) whether or not such a written confirmation has been sent, if the securities in question have become the subject of a completed or executory contract for purchase for or sale to the account.

(b) Where the Debtor held securities in an account for a customer, the customer has a “claim for securities,” notwithstanding the fact that the customer has ordered the securities sold for the account, unless:

(1) the Debtor has sent written confirmation to the customer that the securities in question have been sold for or purchased from the customer’s account; or

(2) whether or not written confirmation of the purchase has been sent, if the securities in question have become the subject of completed or executory contract for sale for or purchase from the account.

Rule 503 — Voidable Securities Transactions

(a) Nothing in these Series 500 Rules shall be construed as limiting the rights of a trustee in a liquidation proceeding under the Act to avoid any securities transaction as fraudulent, preferential, or otherwise voidable under applicable law.

(b) Nothing in these Series 500 Rules shall be construed as limiting the right of the Securities Investor Protection Corporation, in a direct payment procedure under section 10 of the Act, to reject a claim for cash or a claim for securities if such claim arose out of a securities transaction which could have been avoided in a liquidation proceeding under the Act.