The Securities and Exchange Commission on Tuesday released a proposed rule for when large broker-dealers are liquidated as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was implemented in response to the 2008 collapse of Lehman Brothers and the ensuing financial crisis.

Drafted in consultation with the Securities Investor Protection Corp. (SIPC) and the Federal Deposit Insurance Corp. (FDIC), the regulation aims to implement Section 205 of Title II of Dodd-Frank. It would help ensure that clients “are treated in a manner at least as beneficial as would have been the case in a liquidation under the Securities Investor Protection Act,” according to the SEC.

“I am very pleased with the excellent cooperation we had with FDIC and SIPC staff on this project,” said SEC Chairwoman Mary Jo White, in a press release. “This proposal will help ensure that in the event there is a need for the orderly liquidation of a broker-dealer, the process is handled in a manner that minimizes disruption and promotes public confidence. We look forward to receiving public comment on the proposal.”

The proposed rule also clarifies how activities associated with a liquidation should be carried out, such as the notice and application for a protective decree to be filed at the outset of orderly liquidation, transfer of customer accounts to the bridge broker or dealer, and the role of the SIPC as trustee and the FDIC as receiver.

The 85-page document can be found online. Advisors and other interested parties are asked to submit comments over the next 60 days via www.fidc.gov/regulations/law/federal or www.sec.gov/rules/propose.shtml.