Securities Investor Protection Corporation (SIPC) Explained
The Securities Investor Protection Corporation is a federally mandated, member-funded, non-profit corporation created under the Securities Investor Protection Act (SIPA) of 1970 that mandates membership of most US-registered broker-dealers. The SIPC is not a government agency or regulatory body.
The primary role of the SIPC is to restore investors’ cash and securities when their brokerage firm fails. If it happens, SIPC protects the securities and cash in your brokerage account up to $500,000. The $500,000 protection includes up to $250,000 protection for cash in your account to buy securities.