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Investors
SIPC steps in when a brokerage firm fails financially, and assets are missing from customer accounts.
SIPC protects customer assets when a SIPC-member brokerage firm fails financially.
Understand how SIPC protection works if you have multiple accounts.SIPC has recovered billions of dollars for investors. Our job is to recover missing cash or securities if your brokerage firm has gone out of business. SIPC does not protect digital asset securities that are investment contracts that are not registered with the U.S. Securities and Exchange Commission, even if held by a SIPC member brokerage firm.
SIPC has issued Investor Bulletins explaining SIPC’s protection and claims process. Click here for Part I ("SIPC Basics"). Click here for Part II ("Filing a SIPC Claim").
WASHINGTON, DC - December 20, 2024 - The Securities Investor Protection Corporation (SIPC) welcomes the recent adoption by the Securities and Exchange Commission (SEC) of an important investor protection measure. After proposing amendments in July 2023 to SEC Rule 15c3-3, known as the Customer Protection Rule, the SEC has adopted final amendments that would require larger broker-dealers that custody customer cash and securities to calculate and set aside in a reserve account assets owed to customers on a daily, rather than weekly, basis.
The weekly frequency of calculation was established when the Rule was first adopted by the SEC over fifty years ago, in 1972, and has not since been modernized. The original adoption of Rule 15c3-3 grew out of the Securities Investor Protection Act of 1970, which both created SIPC and mandated that the SEC adopt financial responsibility rules for broker-dealers. In adopting Rule 15c3-3 and creating a customer reserve requirement, the SEC stated that an objective of the Rule was to “inhibit the unwarranted expansion of a broker-dealer’s business through the use of customers’ funds....”
As explained by the SEC, the weekly updating of the required customer reserve can allow temporary but substantial mismatches to develop between the amounts owed to customers and the amounts on reserve. The adopted change to daily calculation will more quickly apply the protections of the Rule to customers’ newly deposited cash. The change also will reduce the risk of insufficient assets to return to customers if a larger broker-dealer fails financially, and the attendant risk to the SIPC Fund. The SIPC Fund is used to restore investors’ missing assets in the event of a brokerage firm failure.
SIPC President and CEO Josephine Wang said, “As part of its core mission of being the safety net for investors in the rare event of a brokerage failure and thereby instilling investor confidence in the nation’s securities markets, SIPC supported this modernization initiative through public comment when it was proposed. We applaud the SEC’s final adoption of the Rule as a measure that advances the SEC’s and SIPC’s common mission of investor protection.”
Created by Congress, SIPC was established as a nonprofit under the Securities Investor Protection Act of 1970. It is tasked with creating and administering a Fund that is used to restore investors’ missing assets in the event of a brokerage firm failure. Since 1971, through 330 liquidation proceedings and direct payment procedures, SIPC has distributed more than $140 billion for the benefit of more than 773,000 investors who otherwise might have lost their life savings.