What is the SIPC?

 

A: SIPC stands for the Securities Investor Protection Corporation, which is a non-profit, non-government, membership organization that consists of broker-dealers.  Almost all broker-dealers that are registered with the SEC are members of this corporation.

The main purpose of the SIPC is to recover securities and funds for investors if a broker-dealer becomes insolvent or bankrupt.  SIPC coverage also protects investors in unauthorized trading cases.

Broker-dealers that belong to the SIPC are required to display an official sign reflecting their membership in the organization.  If you are not sure if your broker is a member, you can research the SIPC member database.