Securities Investor Protection Corporation (SIPC)

Securities Investor Protection Corporation (SIPC),

Definition of Securities Investor Protection Corporation (SIPC):

  1. The Securities Investor Protection Corporation (SIPC) is a nonprofit corporation created by an act of Congress to protect the clients of brokerage firms that are forced into bankruptcy. Members to the SIPC include all brokers and dealers registered under the Securities Exchange Act of 1934, all members of securities exchanges and most NASD members. SIPC coverage protects members in the event the firm fails.

  2. SIPC is an insurance that provides brokerage customers up to $500,000 coverage for cash and securities held by the firm (although coverage of cash is limited to $250,000).

  3. A non-profit corporation that insures investment accounts held by member brokerage firms against fraud and insolvency. The insurance covers both cash and investment holdings and is capped at $500,000 ($100,000 in cash) per depositor. The SIPC is funded by member firms and does not insure deposits against investment losses or the purchase of worthless stocks.

Meaning of Securities Investor Protection Corporation (SIPC) & Securities Investor Protection Corporation (SIPC) Definition