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In December
2003, several insurance companies that offered
account protection excess over the basic account
protection coverage provided by the Securities
Investor Protection Corporation ("SIPC")
announced that they will no longer offer such
excess account protection.
As a result, a group of securities firms worked
throughout 2003 to organize and capitalize Customer
Asset Protection Company ("CAPCO").
CAPCO is an insurance company currently licensed
by the state of Vermont. CAPCO
provides to participating securities broker/dealers
net equity excess account protection over the
protection limits currently provided by the
Financial Services Compensation Scheme ("FSCS")
for institutional and individual clients' securities
accounts. The FSCS is administered by the Financial
Services Authority ("FSA").
The Excess FSCS protection offered by CAPCO
is similar to the Excess SIPC protection previously
available from the U.S. insurance market, and
recently made available by CAPCO in the U.S.
Similar to the Excess SIPC coverage, each client
account, subject to certain conditions and limitations,
is protected up to its net equity for securities
and cash held in the account at the brokerage
firm.
The broker/dealers that receive CAPCO's Excess
FSCS protection are:
Bear, Stearns International Limited
Credit Suisse Securities (Europe) Limited
Edward Jones Limited
Goldman Sachs International
Lehman Brothers International (Europe)
Morgan Stanley & Co. International plc
Pershing Securities Limited
No other firms currently receive Excess FSCS
protection from CAPCO.
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