Definition of "Securities investor protection corporation (sipc)"
Federal insurance fund that protects assets in client accounts held by registered securities broker-dealers. The SIPC is a nonprofit corporation created by Congress in 1970 under the Securities Investor Protection Act. Membership in SIPC is mandatory for all broker-dealers registered with the securities and exchange commission and with the national stock exchanges. When the SIPC is unsuccessful in finding a healthy firm to acquire a failed brokerage, it pays off account holders of the failed brokerage for losses up to the coverage limit. Maximum coverage for cash and securities in a customer's account is $500,000, with a limit of $100,000 on the amount of cash that is insured
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