The Securities Investor Protection Corporation (SIPC) is a non-profit organization established by the United States Congress in 1970 to provide limited protection to customers of failed brokerage firms. The SIPC’s mission is to help investors recover their money in case a brokerage firm fails, and it plays a vital role in safeguarding investors’ interests in the US financial markets.

There is no requirement that a customer reside in or be a citizen of the United States. A non-US citizen with an account at a brokerage firm that is a member of SIPC is treated the same as a resident or citizen of the United States with an account at a SIPC member brokerage firm.

SIPC insurance provides coverage for customers of SIPC-member brokerage firms in case of their failure. SIPC coverage is limited to up to $500,000 per customer, including a maximum of $250,000 in cash. This coverage applies to each separate account owned by a customer, including individual accounts, joint accounts, retirement accounts, and trust accounts. SIPC insurance protects against the loss of cash and securities held by a brokerage firm on behalf of its customers in the event of the firm’s failure, bankruptcy, or liquidation.

It’s important to note that SIPC insurance does not cover against investment losses due to market fluctuations or the performance of the investments themselves.

SIPC insurance has played a crucial role in helping investors recover their money in cases of brokerage firm failures.

Further details of what the SIPC protects – and what its limitations are – can be found on this page of the SIPC’s website.

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