August 27, 2009
I am concerned about the protection offered to clients whose investment advisers would be covered by these new rules. Would these investment advisers also be considered to be brokers or dealers, and therefore required to register with the SIPC? If not, what guarantee is there that the clients would be covered by the SIPC? The Securities Investor Protection Act only requires registration for those who are brokers or dealers, and the definitions in the Investment Advisers Act imply that there are some investment advisers who are not brokers or dealers.
It could very well be that this is beyond the scope of the rule currently under consideration, and would be best considered as a revision to the Securities Investor Protection Act.