We are the Securities Investor Protection Corporation,
also known as SIPC.
SIPC is a non-profit corporation
created by Congress some 50 years ago.
It is an important part of the overall
system of investor protection in the United States.
We work to restore investors’
cash and securities when a brokerage firm fails.
SIPC protects the customers
of all registered brokerage firms in the United States.
To help explain, let’s take each part of our name:
Securities. Securities are investments,
such as stocks and bonds.
When you buy stocks or bonds,
you usually don’t take them home.
Instead, they are held in an account at a brokerage firm.
The broker can trade them on your behalf.
Investor. That’s you, the brokerage customer,
who has bought stocks or bonds
and has asked a brokerage firm to hold them.
You may also have some cash in your account
at the brokerage firm because of stock sales
or for future purchases.
Protection. That’s us.
Our job is to recover missing cash or securities
if your brokerage firm goes bankrupt
or is in financial trouble.
Importantly, we can only protect you
if the brokerage firm is a member of SIPC.
To find out if your brokerage firm is a member,
click on the link on our homepage with this icon.
Corporation. We are a membership corporation,
created by federal law, which means brokerage firms
that are SIPC members must abide by certain rules.
This gives their customers peace of mind.
Investors know that if their SIPC-member brokerage firm
fails and if securities or cash are missing,
SIPC will work to recover them.
And if SIPC cannot obtain customer assets,
we will work to replace your assets.
It is rare that a brokerage firm fails
or has to close suddenly. But if it does,
SIPC helps close the firm through a process called liquidation.
This means we work to liquidate the failed brokerage firm’s business
and establish a claims process to get you back your property.
During this process, SIPC works to return your securities
and cash as quickly as possible.
In some cases, we may transfer your assets to another
brokerage firm quickly after your firm has failed.
There are some limits to what SIPC can protect.
SIPC protects your account up to $500,000 in securities.
This includes a $250,000 limit for cash you may have had in the account.
If your account was worth more than $500,000
on the day liquidation began, and customer assets
are recovered during the liquidation
which is often the case
you share in that recovery up to the value of your account.
It is important to know that we can’t protect investors
from declines in the stock market,
or from bad advice on investments by your broker.
So, for your protection,
make sure your brokerage firm is a SIPC member.
Look for the SIPC logo,
and check on our website to confirm your brokerage firm’s membership.