What is a 'Securities Investor Protection Corporation - SIPC'
A securities investor protection corporation (SIPC) is a nonprofit corporation created by an act of Congress to protect the clients of brokerage firms that are forced into bankruptcy. Members to the SIPC include all brokers and dealers registered under the Securities Exchange Act of 1934, all members of securities exchanges and most NASD members.
BREAKING DOWN 'Securities Investor Protection Corporation - SIPC'
SIPC is an insurance that provides brokerage customers up to $500,000 coverage for cash and securities held by the firm (although coverage of cash is limited to $250,000).