United States:
Federal Register: Agencies Finalize Orderly Liquidation Rule For Covered Broker-Dealers
02 September 2020
Cadwalader, Wickersham & Taft LLP
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An SEC and FDIC final rule governing the orderly liquidation of
"covered broker-dealers" was published in the Federal Register. The term
"covered broker dealers" applies to large broker-dealers
that may be subject to liquidation by the FDIC under the Dodd-Frank
Act, rather than dissolution under the Securities Investor
Protection Act ("SIPA").
As previously covered, under the final rule, the
SEC and the FDIC clarified:
- how the customer protections of SIPA will be integrated with
the orderly liquidation provisions of Dodd-Frank;
- the role of the FDIC as a receiver and that of the Securities
Investor Protection Corporation (or "SIPC") as the
trustee of a failed broker-dealer; and
- the administration of claims in an orderly liquidation
process.
The rule will go into effect on October 30, 2020.
Primary Sources
- Federal Register: Covered Broker-Dealer Provisions
under Title II of the Dodd-Frank Wall Street Reform and Consumer
Protection Act
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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