SIPC President Signs Cooperative Agreement with Taiwan Counterpart, Meets Other Investor Compensation Groups

WASHINGTON, D.C. – June 15, 2006 – The Securities Investor Protection Corporation (SIPC) announced today that it entered into a memorandum of understanding (MOU) on June 2nd with the Securities and Futures Investor Protection Center (SFIPC) of Taiwan in order to better protect investors in the event of a brokerage firm failure in both the U.S. and Taiwan.

The presidents of the two groups signed the MOU in Taipei. SIPC was created by Congress to maintain a special reserve fund to help investors at bankrupt brokerage firms.

SIPC President Stephen Harbeck said that the two organizations began work on the agreement last year during a conference in Taipei sponsored by the International Organization of Securities Commissions (IOSCO).

Harbeck said: "We are planning for an event we hope never occurs: the failure of a major brokerage firm that has offices and customers in both Taiwan and the United States. We now have a framework to plan, communicate, and cooperate in the event of such a financial failure."

SFIPC President Tsai-Hung Chen visited Washington twice to work out the details of the document.

SIPC already has similar MOUS in place with its counterparts in the United Kingdom and Canada.

After the signing ceremony in Taipei, Harbeck gave a presentation on June 6 to an Investor Compensation Fund Regulators meeting sponsored by the Securities and Futures Commission in Hong Kong. Representatives from Canada, India, Hong Kong, Thailand, and Malaysia were in attendance. The participants exchanged information about the various protection programs available to investors in each venue, and how those protections differed from each other.

Harbeck said: "The more each Investor Compensation Fund learns about similar organizations around the world, the faster we will be able to sort out the inevitable jurisdictional problems which will arise in a financial crisis. The time to do so is before a crisis, not during a financial meltdown. SIPC hopes to replicate the Memorandum of Understanding process across the globe."