It is important
to understand that protection by the Securities
Investor Protection Corporation ("SIPC")
is not the same as the "Excess SIPC"
protection provided by CAPCO. CAPCO does not
offer SIPC protection. SIPC is the sole source
of SIPC protection. There is no affiliation
between CAPCO and SIPC.
In 1970, Congress enacted the Securities Investor
Protection Act ("SIPA") and created
SIPC as a nonprofit organization to protect
clients of member securities firms that may
fail or be liquidated. If any securities or
cash are missing from eligible client accounts,
SIPC steps in to help replace those securities and
cash. SIPC may provide up to $500,000 of net
equity protection, including up to $100,000 for claims
for cash awaiting reinvestment. SIPC does not
protect against losses from the rise and fall
in the market value of investments.
SIPA is "market neutral." SIPC replaces
missing stocks and other securities where it
is possible to do so regardless of whether the
investments have increased or decreased in value.
SIPA protection applies to the cash and securities
(as "securities" is defined by SIPA), such as
stocks and bonds, held by a customer (as "customer"
is defined by SIPA) at a financially-troubled
securities firm. SIPA protection extends to
retail brokerage investors as well as insitutional
SIPC does not compensate individuals who are
sold worthless stocks and other securities or whose securities decline in value.
Among the investments that are ineligible for
SIPC protection are commodity futures contracts
and currency, as well as investment contracts
(such as limited partnerships) and fixed annuity
contracts that are not registered with the U.S.
Securities and Exchange Commission under the
Securities Act of 1933.
for further information about SIPC.