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Frequently Asked Questions

Q: Why did I receive an invoice from SIC®?

Q: What does SIC® do?

Q: Our firm only has a small percentage of transactions involving physical certificates and we want to know how the usage allocation is calculated?

Q: Why did the bill increase/decrease since your last invoice?

Q: As a bank I would like to know how this program benefits me?

Q: Our firm does not handle any physical securities, do we still have to register? Can we file for an exemption?

Q: Our firm would like to cancel our service with the Securities Information Center, what do we have to do?

Q: Why does my invoice fluctuate from billing period to billing period?

 

Q: Why did I receive an invoice from SIC®?

A: SIC® operates the Lost & Stolen Program on behalf of the SEC. You have enrolled in this program in order to be in compliance with SEC regulation and as a result you will receive an invoice on a semi-annual basis.

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Q: What does SIC® do?

A: SIC® operates the Lost & Stolen Program on behalf of the Securities and Exchange Commission. This program was started in 1977 as a means for reducing trafficking in lost, stolen, missing, and counterfeit securities. The program is a database of securities that would be rejected if they were sent to the DTCC/Transfer Agent. When the database is accessed by inquiring members we notify them if there is a stop placed on that certificate and prevent them from incurring a financial loss either through reject fees, fraudulent use of collateral, or illegal trafficking in stolen certificates.

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Q: Our firm only has a small percentage of transactions involving physical certificates and we want to know how the usage allocation is calculated?

A: The amount of your invoice is not related to how much your firm has, or has not, used the program in the past six months. Instead, your invoice is based on the size and type of institution that you selected when you registered with our program. The total usage for the six month period is spread across all direct registered members based on what category your selections indicated. You may view the detail report section for more information on how the usage was allocated for the last bill and what size institution you are registered as.

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Q: Why did the bill increase/decrease since your last invoice?

A: The bill will fluctuate from one billing cycle to the next based on the industry volume for that particular billing cycle. There are no hidden fees or costs since the SEC contractually dictates the billing formula and it may not be amended. Your bill is dictated by the industry usage over the past six months.

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Q: As a bank I would like to know how this program benefits me?

A: Please click here to read a release from the FDIC regarding the benefits of utilizing SIC®.

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Q: Our firm does not handle any physical securities, do we still have to register? Can we file for an exemption?

A: All registered FINRA broker dealers, FDIC insured banks, and transfer agents handling physical certificates must be registered with the Securities Information Center as stated by SEC Regulation Rule 240.17f-1. If a firm does not handle any physical securities and has registered with SIC®, then you can file for an exemption with SIC® which will forego any billing invoices being sent out. If you would like to file for an exemption we need a letter on company letterhead with original signatures. In this letter we need stated that your firm does not handle physical securities and that you would like to file for an exemption. This letter must be into SIC® 60 days prior to the next billing cycle to avoid being billed.

New FDIC insured banks or FINRA members that do not handle physical certificates are exempt from SEC Regulation Rule 240.17f-1 and do not need to register with SIC®.

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Q: Our firm would like to cancel our service with the Securities Information Center, what do we have to do?

A: A firm can only cancel the service with SIC® if they have merged with another registered firm or have been acquired by another firm. If a firm has merged or been acquired then we would need a letter on company letterhead with original signatures. In this letter we need stated that you would like to cancel the service with SIC® due to a merger/acquisition with firm A. This letter must be into SIC® 60 days prior to the next billing cycle to avoid being billed in the next billing cycle.

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Q: Why does my invoice fluctuate from billing period to billing period?

A: The SEC’s billing formula is designed to spread usage costs of the Lost and Stolen Securities Program (LSSP) evenly across the industry, based on an institution’s size. The usage amount of each invoice is determined by two factors – the total volume over the six-month period (Jan-June & July-Dec) and the number of billable institutions (direct participants) to invoice. Each of these factors fluctuates between billing cycles which leads to an increase or decrease when compared to the prior invoice.

Over the past several years, the industry has trended towards consolidation of companies that were once billable by SIC®. These consolidations have led to a significantly smaller pool of institutions to spread LSSP usage across; resulting in higher usage charges. This consolidation trend has been ongoing for many years now but we are hopeful that the number of billable institutions stabilizes in the near future to avoid large fluctuations.

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