SIE Exam Question 363: Answer and Explanation

Question: 363

The Securities Investor Protection Corporation (SIPC) protects customers from

• A. issuer bankruptcy.
• B. market loss.
• C. identity theft compromising customer accounts or the broker-dealer.
• D. broker-dealer financial failure.

Correct Answer: D

Explanation:

D - SIPC coverage protects customers from financial loss in the event of the financial failure of a broker-dealer. It protects each separate customer for up to $500,000 total, but no more than $250,000 in cash. Importantly, SIPC does not protect against market losses.