[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Notices]
[Pages 40052-40053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19467]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. SIPA-159/July 25, 1996]
Securities Investor Protection Act of 1970; Securities Investor
Protection Corporation; Notice of Determination That WestLB Securities
Americas Inc. Is a Member of SIPC
Notice is hereby given that on June 11, 1996, the Securities
Investor Protection Corporation (``SIPC'') informed the Securities and
Exchange Commission (``Commission'') that WestLB Securities Americas
Inc. (``WestLB'') is no longer eligible for the exclusion from SIPC
membership under section 3(a)(2)(A)(i) \1\ of the Securities Investor
Protection Act of 1970 (``SIPA''). The Commission is publishing this
notice to inform the public that, pursuant to SIPC's determination,
WestLB is now a member of SIPC.
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\1\ 15 U.S.C. Sec. 78ccc(a)(2)(A)(i) (1995).
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I. Introduction
Section 3(a)(2) \2\ of SIPA provides that, with certain exceptions,
all broker-dealers registered pursuant to Section 15(b) \3\ of the
Securities Exchange Act of 1934 are members of SIPC. Section
3(a)(2)(A)(i) provides an exception to SIPC membership for broker-
dealers whose principal business, in the determination of SIPC, taking
into account the business of affiliated entities, is conducted outside
the United States and its territories and possessions.
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\2\ 15 U.S.C. Sec. 78ccc(a)(2)(A) (1995).
\3\ 15 U.S.C. Sec. 78o(b) (1995).
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II. Background and Discussion
WestLB, formerly known as RWS Securities, Inc., is a corporation
organized under the laws of the United States and is a wholly owned
subsidiary of Westdeusche Landesbank
[[Page 40053]]
Gironzentrale (``Westdeusche Landesbank''). WestLB registered with the
Commission pursuant to Section 15(b) on June 4, 1976 and is a member of
the National Association of Securities Dealers, Inc. In 1985, SIPC
determined that WestLB qualified for an exception from SIPC membership
under Section 3(a)(2)(A)(i), and on July 17, 1985, the Commission
affirmed SIPC's determination that WestLB was a person whose business
was conducted outside the United States, its territories and
possessions, and therefore was not a member of SIPC.\4\ At that time,
WestLB had only one customer, Westdeusche Landesbank, located in
Germany, and the firm cleared all of its transactions on a fully
disclosed basis through a SIPC member. Although WestLB received
revenues from its clearing broker in the United States, those revenues
stemmed exclusively from transactions conducted by WestLB for
Westdeusche Landesbank, acting on behalf of its customers located in
Germany.
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\4\ Release No. SIPA-124 (July 17, 1985).
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However, on June 11, 1996, SIPC determined that WestLB is no longer
eligible for exclusion from SIPC membership under Section 3(a)(2)(A)(i)
of SIPA because WestLB's principal business is no longer conducted
outside the United States, its territories or possessions.\5\ In the
information supplied to SIPC, WestLB now reports that it has U.S.
customers and that the majority of its gross revenues from the
securities business for its latest fiscal year arise out of
transactions in the United States, its territories, and possessions.
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\5\ Letter from Stephen P. Harbeck, Secretary, SIPC, to Arthur
Levitt, Chairman, SEC, dated June 11, 1996.
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III. Protection Under SIPA
The effect of SIPC's determination is that WestLB now is a member
of SIPC; therefore, WestLB's customers are afforded the protections of
SIPA. In the event of a broker-dealer's liquidation, under SIPA,
customers of a failed firm receive securities that are in the
possession of the firm, that are registered in their names and that are
not in negotiable form. Customers are then entitled to their pro rata
share of all remaining cash and securities of customers held by the
firm. After the above distribution, SIPC funds are available to satisfy
the remaining claims of each customer up to a maximum of $500,000,
including no more than $100,000 for cash claims (as distinct from
claims for securities).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-19467 Filed 7-30-96; 8:45 am]
BILLING CODE 8010-01-M
