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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 would 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. Until early 2009, CAPCO
provided to participating securities broker/dealers
"Excess SIPC" net equity protection
for institutional and individual clients' securities
accounts. This Excess SIPC protection is excess
of the protection provided by the Securities
Investor Protection Act ("SIPA"),
which is administered by SIPC.
The Excess SIPC protection provided by CAPCO
is similar to the Excess SIPC protection that
had previously been available from the U.S.
insurance market. It was intended to protect
U.S. client accounts and follows the underlying
terms of SIPA. Similar to the coverage previously
available, 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.
Due to expiration of all outstanding CAPCO surety bonds in February 2009, only customers of Lehman Brothers Inc. are potentially eligible for Excess SIPC protection from CAPCO.
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About CAPCO