SIPA meaning

In practice, SIPA refers to the US Securities Investor Protection Act of 1970, which governs the insolvency and court‑supervised liquidation of failed US broker‑dealers and the return of customer assets. It is a US federal statute, administered by the Securities Investor Protection Corporation (SIPC), and has been applied to firms such as Lehman Brothers Inc. Key features include: the appointment of a SIPA trustee; a statutory stay; pooling and distribution of “customer property” with priority to “customers”; and SIPC advances (currently up to USD 500,000 per customer, including up to USD 250,000 for cash) to facilitate the transfer or return of accounts. SIPA operates alongside the US Bankruptcy Code and contains protections relevant to securities, repo and derivatives close‑outs. For UK and Irish practitioners, SIPA is relevant where clients use US prime brokers or hold US‑custodied assets, or where English or Irish law contracts interface with a US broker‑dealer failure. SIPA proceedings may seek recognition in the UK (for example under the Cross‑Border Insolvency Regulations 2006) and, more generally, can raise conflict‑of‑laws and client asset issues. SIPA is distinct from the UK/EEA client asset regime (CASS) and the FSCS, which do not apply to US broker‑dealers.