SIPA Amended by Dodd-Frank Act. But Not Really.

On my son's 16th birthday, this announcement was made about changes to the Securities Investor Protection Act (SIPA, enforced by SIPC). One of the changes is described as follows:

Sounds clear to me.

"Dodd-Frank Act Section 929V amends the minimum assessment amount for SIPC member firms. The highest amount that SIPC can impose as a minimum assessment has been changed from $150 per annum to 0.02 percent of the gross revenues from the securities business of the SIPC member. (15 U.S.C. §78ddd(d)(1)(C))."

But. If you dig around in SIPC's member site and go to "News for Members," you'll stumble on this July 23, 2010 Notice about the minimum assessment changes. Here's what SIPC says about the Dodd-Frank amendment cited above:

(I can't figure out this out. .02 percent is smaller than .25 percent, so the D-F Act doesn't conflict with SIPC's current assessment rate, so why did SIPC have to put out the 'disregard' notice? Probably because everyone is still tee-oh'ed that they have to pay this new assessment and SIPC assumed everyone would start paying the new minimum (.02 percent) instead of the published rate (.25 percent). If that's the case, then SIPC thinks people actually read this stuff! In the summer, no less! [Birthday] hats off to SIPC for having that kind of faith in compliance personnel.

Well, anyway, here's a change that might really be a change:

"UNTIL FURTHER NOTICE, FOR MEMBERS WHOSE FISCAL YEAR ENDS ON OR AFTER JULY 31, 2010, PLEASE DISREGARD ANY REFERENCE TO A MINIMUM ASSESSMENT. THE SIPC ASSESSMENT WILL CONTINUE TO BE ONE FOURTH (1/4) OF ONE (1) PERCENT (.0025) PER ANNUM OF NET OPERATING REVENUES FROM THE SECURITIES BUSINESS, WITHOUT REGARD TO ANY MINIMUM ASSESSMENT."

Thus paraphrased by the late, great Gilda Radner as "Never mind."*

'In addition, for your information, the definition under the Securities Investor Protection Act of "gross revenues from the securities business" has been changed. Gross revenues now also includes "... revenues earned by a broker or dealer in connection with a transaction in the portfolio margining account of a customer carried as securities accounts pursuant to a portfolio margining program approved by the [Securities and Exchange] Commission." (15 U.S.C. §78lll(9)).'

*Bonus points to those who remember the character played by Gilda when offering this phrase weekly on SNL.