Even the little things

I know I often preach how "real world" the Series 7 information is, but this morning I have to point it out again. I'm doing the usual early Friday morning routine of visiting the FINRA website to see what sorts of disciplinary actions or hot topics are being discussed, and suddenly I'm clicking on a link to SIPC. You've probably seen a few questions about SIPC, but I doubt you've really considered the signficance of this industry-funded organization. Without the protection SIPC provides, I can't imagine how the brokerage industry would function. Take a look at www.sipc.org this morning, and you'll see three headlines dealing with SIPC's protection of missing assets at the now-famous Bernard L. Madoff Investment Securities, LLP (BLMIS). We're talking about hundreds of millions of dollars that investors would otherwise have to eat . . . all protected by this "SIPC" thing that is often just a tricky test question that no one thinks twice about.
Enjoy the real-world view and remember the most testable points about SIPC, including--but not limited to:

• Protects customer assets at failed broker-dealers
• Covers $500,000 per "customer" of which no more than $100,000 "cash" is covered
• An industry-funded, non-profit insurance provider
• Does not cover commodities, only securities