Securities Investor Protection Corporation; Order Approving the Determination Not To Adjust for Inflation the Standard Maximum Cash Advance Amount
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The SEC approved the SIPC Board's decision to keep the standard maximum cash advance amount at $250,000 per customer for the period beginning January 1, 2027 through December 31, 2031. This amount, raised from $100,000 by the Dodd-Frank Act, is provided when customer cash claims in a SIPA liquidation exceed available customer property. The Board reviewed the SIPC Fund's condition, economic factors, market trends, and the historical low level of unsatisfied cash claims (only about $25 million over 54 years). It chose not to increase the limit to $350,000 as inflation would have suggested, primarily to maintain parity with the FDIC's $250,000 deposit insurance limit and because customer free credit balances at broker-dealers have remained stable or declined due to cash sweep programs.
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Key Changes
- Standard maximum cash advance amount remains unchanged at $250,000 per customer
- Applies from January 1, 2027 for the next five-year period (through December 31, 2031)
- Would have increased to $350,000 based on inflation adjustment formula
+ 3 more changes with Pro
Obligations
What this law requires
SIPC Board must determine every five years, no later than January 1st, whether an inflation adjustment to the standard maximum cash advance amount is appropriate
SIPC must file notification with the SEC of the Board's determination regarding inflation adjustment to the standard maximum cash advance amount
SEC must publish notice of the SIPC Board's determination in the Federal Register no later than April 5 of any calendar year in which SIPC is required to determine whether an inflation adjustment is appropriate
SIPC Board must consider the overall state of the SIPC Fund when determining whether to adjust the standard maximum cash advance amount
SIPC Board must consider economic conditions and potential problems affecting SIPC members when determining whether to adjust the standard maximum cash advance amount