Securities Investor Protection Corporation

Securities Investor Protection Corporation (SIPC)

A nonprofit corporation that insures customers' securities and cash held by member brokerage firms against the failure of those firms.

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Securities Investor Protection Corporation (SIPC)

A government sponsored organization created in 1970 to insure investor accounts at brokerage firms in the event of the brokerage firms' insolvency and liquidation. The maximum insurance of $500,000, including a maximum of $100,000 in cash assets per account, only covers customer losses due to insolvencies, not losses caused by security price fluctuations. SIPC coverage is similar in concept to Federal Deposit Insurance Corporation coverage of customer accounts at commercial banks.

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Securities Investor Protection Corporation (SIPC). The Securities Investor Protection Corporation (SIPC) is a nonprofit corporation created by Congress to insure investors against losses caused by the failure of a brokerage firm.

Through SIPC, assets in your brokerage account are insured up to $500,000, including up to $100,000 in cash, but only against losses that result from the brokerage firm going bankrupt, not against market losses caused by trading decisions or other causes.

All brokers and dealers must register with the Securities and Exchange Commission (SEC) and are required to be SIPC members though they can lose their affiliation under certain circumstances. Clients of nonmember firms are not insured.