SIPC insurance

Question 1

What is the SIPC?

Answer 1

An industry funded non-profit that provides insurance to brokerage firm customers in the event of a broker dealer’s bankruptcy

Question 2

How much does IPC insurance cover?

Answer 2

up to 500,000 of securities and cash per registration, but no more than 250,000 in cash

Question 3

What is only covered by SIPC insurance if the customer has a margin account?

Answer 3

The equity

Question 4

When is equity only covered by SIPC?

Answer 4

When the customer has a margin account

Question 5

When 2 times is confirmation of SIPC insurance required?

Answer 5

1. at account opening
2. annually after account opening

Question 6

What type of risk does SIPC insurance not cover?

Answer 6

Market risk

Question 7

What qualifies an account as new coverage and needs separate registration?

Answer 7

When a new owner is involved

Question 8

SIPC provides how much coverage and per what?

Answer 8

500,000 per registration (250 in cash)

Question 9

What does the customer become if the assets in their brokerage account exceeds SIPC coverage if BD goes bankrupt?

Answer 9

General Creditors

Question 10

What 4 things do Business continuity plans include?

Answer 10

1. data recovery
2. meeting locations for employees
3. alternative communication plans for employees
4. alternative communication plans for customers

Question 11

What does Business Continuity Plans address?

Answer 11

protocols during business disruptions

Question 12

When (two times) and where is the Business continuity plan provided to customers?

Answer 12

Upon account opening
Upon written request
On the firm website