SIPC - I’m confused on ho this works. is it a 500k limit or does it cover both cash and securities if under 500k each ? can some one set some examples ?
2 Likes
Hi, here’s a relevant section from our textbook:
SIPC insurance covers brokerage firm customers up to $500,000 of securities and cash per registration, but no more than $250,000 in cash. When a customer has a margin account, only their equity is covered. Meaning, any money owed to the broker-dealer must first be deducted from the customer’s assets prior to applying for SIPC coverage. If a customer exceeds the limits of SIPC insurance, they become general creditors of the broker-dealer.
The quiz questions attached to that chapter allow you to test yourself with additional examples!
2 Likes
I know but like if its 600K in securties and 250 cash. doe sit due 500 plus the 250 ?
No, it’s up to a total of $500k.
so no matter what its capped at 500 ? so if I had 300k securitied and 300k cash its goign to leave 50K cash out ?
Yes, it’s up to a total of $500k!
I heard that DERP is no longer a thing because EX date is now on record date is this correct ??
1 Like
It’s still a thing, but it’s more like D/ER/P now rather than D/E/R/P, since the regular-way ex-date is the same as the record date.
I’m confused what is t+1 and what is t+2 now.
1 Like
All regular-way settlement is T+1 now!