Questions About Audit Reports
Can I get a refund of overpaid assessments?
The Securities Investor Protection Act provides that overpayments shall be recoverable only against future assessments due, except as otherwise provided by law. SIPC Bylaw Article 6 permits refunds of amounts in excess of $150 to terminated members who have satisfied all filing requirements.
How do I become a SIPC member?
All registered brokers or dealers, by law, automatically become SIPC members, except for the following, who may be excluded from SIPC membership:
(i) persons whose principal business, in the determination of SIPC, taking into account business of affiliated entities, is conducted outside the United States and its territories and possessions;
(ii) persons whose business as a broker or dealer consists exclusively of (I) the distribution of shares of registered open end investment companies or unit investment trusts, (II) the sale of variable annuities, (III) the business of insurance, or (IV) the business of rendering investment advisory services to one or more registered investment companies or insurance company separate accounts; and
(iii) persons who are registered as a broker or dealer pursuant to 15 U.S.C. section 78o(b)(11)(A) - broker/dealer registration with respect to transactions in security futures products. See SIPA section 78fff(a)(2)(A) and SIPC-3.
How do I refile an assessment form due to an error in calculation?
Please make a copy of the form that was filed, label it “AMENDED,” and place a line through any incorrect number and write the correct number next to it. Mail the amended form to SIPC’s street address: 805 15th Street, N.W., Ste. 800, Washington, DC 20005.
How do I terminate my SIPC membership?
To terminate the broker-dealer registration and SIPC membership, a completed broker-dealer withdrawal form (Form BDW) must be filed with the Central Registration Depository (CRD). The “effective withdrawal” usually is 60 days after the CRD receives and accepts the filing, and on that date SIPC membership would terminate. Note that SIPC may still initiate a liquidation proceeding up to 180 days after the effective date of the BDW.
I have no revenue during the reporting period, should I put zeros in the revenue and assessment section and file the form?
Is there a review process if a SIPC member has questions about or wishes to challenge an assessable item?
Yes. Address all questions or concerns to the Membership Department, and provide documentation regarding any challenged assessable item. We will advise you of the outcome of our review.
My firm has no public customers, why do I have to be a member?
When Congress passed the Securities Investor Protection Act, it made all SIPC members subject to its provisions, including the obligation to pay assessments into the SIPC Fund. The objective was to instill confidence in the investing public and to place the financial support of the SIPC program on all firms that made their livelihood in the securities business, regardless of whether they had public customers or not. This includes SIPC member firms generating revenue from non-customer activities such as investment banking, raising money for private equity or hedge funds, financial advisory services, equity research, or other activities related directly or indirectly to the securities business.
What assessment forms need to be filed and what are their due dates?
Form SIPC-6, filed for the first six months of each member’s fiscal year, is due 30 days after the period which it covers plus a 15 day grace period.
Form SIPC-7, filed at the end of each member’s fiscal year, less the assessment paid with the Form SIPC-6, is due 60 days after the fiscal year-end (FYE) plus a 15 day grace period.
Any deduction on line 2c(8), on page 2 of the forms, in excess of $100,000 must be accompanied by documentation.
Questions About Audit Reports
Do I have to file a copy of my Annual Report with SIPC?
Yes. Effective December 31, 2013, all broker-dealers must file a copy of their Annual Report with SIPC. See 17 C.F.R. 240.17a-5(d)(6).
When should I file the "Independent Accountant’s Report on Applying Agreed-Upon Procedures Related to an Entity’s SIPC Assessment Reconciliation" in accordance with SEC Rule 17a-5(e)(4)?
This report should accompany the SIPC-7 filing, or if filed separately, should be accompanied by a copy of the filed SIPC-7 or a schedule of payments made. See 17 C.F.R. 240.17a-5(e)(4). This report is not required of those members whose total revenues are $500,000 or less.
Where should I send the Annual Report?
Send the Annual Report to:
Securities Investor Protection Corporation
805 15th Street, N.W., Suite 800
Washington, D.C. 20005-2215