What Does SIPC Protect?
The SIPC fund is designed to protect customer claims for cash and securities lost due to a brokerage firm’s insolvency. Most customers of a broker-dealer with cash and securities missing from their accounts are eligible for SIPC protection. SIPC protects investments in most types of securities, such as notes, stocks, bonds, mutual funds, and other registered securities and cash, but does not cover commodity futures contracts, currency, or unregistered investment contracts, limited partnership interests, or fixed annuity contracts. Under SIPC, customers of failed SIPC broker-dealer firms should receive all securities that were (at the time of the broker-dealer’s failure) registered in the customer’s name or were in the process of being registered. The brokerage firm’s remaining assets then should be distributed to customers on a pro rata basis after paying the costs of administration. If sufficient funds are not available in the firm’s customer accounts to satisfy customer claims, the S
