Account
Account Protection

Safe Investments

  Your stocks, bonds, mutual funds, options, and certificates of deposit are all protected and at no additional cost to you.

  Q.   What is my account protection?
  A.

   As a member of the Securities Investor Protection Corporation (SIPC), funds are available to meet customer claims up to a ceiling of $500,000, including a maximum of $250,000 for cash claims. For additional information regarding SIPC coverage, including a brochure, please contact SIPC at (202) 371-8300 or visit www.sipc.org. Our clearing firm, Penson Financial Inc, has purchased an additional insurance policy through a group of London Underwriters (with Lloyd's of London Syndicates as the Lead Underwriter) to supplement SIPC protection. This additional insurance policy becomes available to customers in the event that SIPC limits are exhausted and provides protection for securities and cash up to an aggregate of $600 million. This is provided to pay amounts in addition to those returned in a SIPC liquidation. This additional insurance policy is limited to a combined return to any customer from a Trustee, SIPC and London Underwriters of $150 million, including cash of up to $2 million. Similar to SIPC protection, this additional insurance does not protect against a loss in the market value of securities.

  Q.   What kinds of assets are covered?
  A.

   Your stocks, bonds, mutual funds, notes, debentures, warrants, rights, options, money market funds and certificates of deposit are protected in the event of losses resulting from a brokerage firm's insolvency or liquidation. However, it is important to note that the account protection does not protect against losses due to market fluctuations. SIPC and the supplemental policy do not cover commodity contracts and options on futures.

  Q.   What is the Securities Investor Protection Corporation?
  A.

   SIPC is a non-profit member organization of broker-dealers created in 1970 by an act of Congress. It protects customers of those broker-dealer members that for some reason can't meet their financial obligations to their customers.
  Q.   Where does SIPC get the funds to protect me?
  A.

   SIPC can draw on approximately US$790 million of member contributions and interest earned from U.S. Government Securities. It also has a US$1 billion line of credit with a bank consortium. And if necessary, SIPC can also borrow up to US$1 billion from the U.S. Treasury.
  Q.   Is my money market investment considered cash and therefore covered up to US$100,000?
  A.

   Money market funds are in fact investment companies that invest in short term securities. While these investments are almost as liquid as cash, they considered a security - so your money market investments are protected up to US$10 million in each separately registered account.
For more information on Account Protection, call our Client Support at 1.888.353.6676 or 1.415.901.0311.