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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Securities Investor Protection Corporation

A not-for-profit organization mandated under American law to insure investors against the potential bankruptcy of a broker-dealer. If a broker or dealer goes bankrupt after a client has entrusted it with cash or securities, the SIPC will compensate the client up to $500,000 (or $100,000 if the client is owed only cash). All brokers, dealers, and exchanges registered with the SEC are required to be members of the SIPC and fund its activities. It is important to note that the SIPC does not insure against losses by investors, only against the possibility of a broker-dealer being unable to conduct a transaction because of bankruptcy.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
SIPC liquidation proceedings are designed to protect the claims of
custodial customers of a SIPC member with respect to the distribution of
SIPC may, upon notice to a member, file an application for a
judicial order "requiring SIPC to discharge its obligations,"
of the broker-dealer's business as specified by SIPC, (27) and
The primary goal of a SIPC liquidation proceeding is to distribute
customer property recovered by the SIPC trustee, as described in Part
If the SIPC trustee succeeds in locating one or more SIPC
For smaller broker-dealers, SIPC may expedite liquidation by paying
(38) Otherwise, depending on the broker-dealer's size, SIPC may
against the SIPC member's general estate (but not customer
relation to the amounts advanced by SIPC to customers.