SIE practice questioneasySIPC Protection
What is the primary purpose of the Securities Investor Protection Corporation (SIPC)?
- ATo protect customers if a broker-dealer fails financially✓ Correct answer
- BTo regulate mutual fund fees
- CTo insure bank deposits up to $250,000
- DTo guarantee investors against market losses
Explanation
Why A — To protect customers if a broker-dealer fails financially
SIPC protects customers of SIPC-member broker-dealers if the firm fails financially, covering up to $500,000 per customer (including up to $250,000 in cash). SIPC does NOT protect against market losses — this is a critical distinction. The FDIC (not SIPC) insures bank deposits. SIPC coverage applies when a brokerage firm becomes insolvent, not when investments decline in value.
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.
Related Regulatory Framework questions
- The Municipal Securities Rulemaking Board (MSRB) writes rules for which of the following?
- Which federal agency has primary responsibility for enforcing the federal securities laws and regulating the securities…
- The FDIC insures deposits at member banks up to what amount per depositor, per insured bank?
- An investor holds $400,000 in securities and $300,000 in cash in a single brokerage account at a firm that becomes…