WASHINGTON, D.C. -- March 29, 2005 -- The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund to protect the customers of insolvent brokerage firms, has met with officials of both the China Securities Regulatory Commission and the Securities and Futures Investor Protection Center in Chinese Taipei in recent months.

In December 2004, Stephen Harbeck, SIPC president and CEO, gave a presentation at a conference in Beijing, sponsored by The World Bank and the Development Research Center of The State Counsel. Harbeck's presentation, entitled "Brokerage Firm Failures in China: Possible Solutions to the Problem," focused on ways to prevent such failures, including requirements for adequate capitalization, the segregation of customer assets from the assets of the brokerage, and rigorous financial examinations to assure compliance with those rules.

Harbeck met with senior officials of the China Securities Regulatory Commission to discuss the possible creation of an entity to protect brokerage firm customers in the event of the complete collapse of such a firm.

In February, Harbeck gave a keynote speech entitled "Investor Protection Policy and Implementation in Developed Countries" to a meeting of the International Organization of Securities Commissions, in Chinese Taipei. Harbeck discussed the protections available under the Securities Investor Protection Act (SIPA) in the United States, and concentrated on the narrow focus of that protection.

Harbeck compared the protections available under SIPA with comparable programs in Canada, the United Kingdom and other European Union programs, Russia, and Singapore. Harbeck said: "Investor protection programs in developing markets will serve to induce domestic investors to have confidence in the market systems of jurisdictions adopting those protections. Such a development would have the added benefit of giving a greater degree of confidence to foreign investors."

In a subsequent panel discussion, Mr. Harbeck compared the protections provided by SIPC with the broader responsibilities of the Securities and Futures Investor Protection Center in Chinese Taipei, which include mediation, and the equivalent of class action litigation. He noted that class action litigation is conducted by private litigants and contingent fee counsel in the United States, whereas cultural factors weigh against such private litigation in Chinese Taipei.