What Is The Securities Investor Protection Act?

It is a law that establishes the Securities Investor Protection Corporation (SIPC) which acts to insure investors for up to $500,000 when the brokerage firm is a member. It includes up to $100,000 for cash accounts. Many firms purchase private insurance to increase an investor's coverage even beyond these limits. It is important to realize that this coverage is not designed to protect you for losses due to market conditions.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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