SIE practice questioneasySIPC Protection
The Securities Investor Protection Corporation (SIPC) protects customers against:
- AInvestment losses due to market decline
- BLoss of securities and cash when a broker-dealer fails financially✓ Correct answer
- CInflation eroding the value of investments
- DFraud committed by a registered representative
Explanation
Why B — Loss of securities and cash when a broker-dealer fails financially
SIPC protects customers against loss of cash and securities, up to $500,000 including $250,000 for cash, held at a broker-dealer that fails financially or becomes insolvent. SIPC does not protect against market losses, representative fraud, or inflation, and it is not a government agency.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Regulatory Framework questions
- What is the maximum SIPC coverage per customer at a failed broker-dealer?
- Which regulatory body writes rules governing broker-dealers in the municipal securities market and what is the scope of…
- Which of the following distinguishes SIPC from FDIC insurance?
- A broker-dealer must comply with which acts when distributing new mutual fund shares to the public?
- Under Regulation S-P (SEC privacy rule), broker-dealers must provide customers with a privacy notice that explains:
- A broker-dealer fails to supervise its registered representatives. This is a violation of:
- SEC Rule 15c3-1 (the net capital rule) requires broker-dealers to:
- Which organization primarily regulates broker-dealers and registered representatives in the securities industry?