How is my customer’s account protected with “excess SIPC” coverage?
Customer accounts are protected in the event that SIPC limits are exhausted. The additional insurance becomes effective after the implementation of SIPC coverage. The coverage is in place to protect the customer in the event of a theft, misplacement, destruction, burglary, embezzlement or abstraction of customer securities. It does not protect the customer from declining changes in market value. Q: What triggers SIPC and “excess SIPC” coverage? A: Three things must happen for SIPC and “excess SIPC” coverage to be triggered: • There is a financial failure and a liquidation of the carrying Broker Dealer • Securities/Cash are missing from an account • SIPC pays each client in accordance with their pro-rated share of the loss, up to $500,000 per account (of which $100,000 may be cash) Q: What is the amount of coverage that the London Underwriters provide? A: This additional insurance policy is limited to a combined return to any customer from a Trustee, SIPC and London Underwriters of $150
