What does SIPC cover and how does it differ from Federal Deposit Insurance Corporation (FDIC) insurance?
SIPC coverage replaces missing stocks and other securities in cases in which it is possible to do so-even when the investments have increased in value. SIPC protects the cash and securities, such as stocks and bonds, held at a financially troubled broker-dealer. SIPC covers retail brokerage investors, as well as institutional investors. SIPC does not cover individuals who are sold worthless stocks and other securities. Among the investments that are ineligible for SIPC protection are commodity futures contracts, precious metals, and bank deposits, as well as investment contracts (such as limited partnerships), and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission (SEC) under the Securities Act of 1933. It is also important to understand that SIPC protection is not the same as FDIC protection. SIPC does not offer to investors the same blanket protection that the FDIC provides to bank depositors. The FDIC protects deposits up to $100,000 ($2
