Discuss Finra Series-63 Exam Topic 7 Question 4

As an agent, which of the following statements about the Securities Investor Protection Corporation (SIPC) can you legitimately make to your client?

AThe SIPC is the FDIC of the stock and bond markets.''

B''The SIPC was established to restore funds to investors when the brokerage firm they have been using is bankrupt or in financial distress.''

C''The SIPC is a government agency created by an Act of Congress to combat fraud.''

D''The SIPC is a government agency that was created by an Act of Congress to protect investors against losses in the stock and bond market.''

Suggested Answer: B

The statement that you can legitimately make about the SIPC to your client is that it was established to restore funds to investors when the brokerage firm they have been using is bankrupt or in financial distress. The SIPC does not insure investors against losses in the stock and bond markets like the FDIC does bank deposits, and it does not combat fraud.

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14 comments · newest first

Solange 11 months ago

Really? I thought it was just for bankruptcies.

Jina 11 months ago

Nope, it's broader than that, protects against losses too.

Leonora 12 months ago

Wait, isn't it just for fraud?

Leota 12 months ago

Totally agree, it helps when brokers go under.

Cassie 1 year ago

SIPC is like FDIC but for stocks!

Mabel 1 year ago

I’m pretty sure the SIPC protects investors, but I’m not clear on whether it’s a government agency or not.

Rebecka 1 year ago

I feel like I read that the SIPC was created to combat fraud, but I can't recall if that's entirely accurate.

Roosevelt 1 year ago

I practiced a question about the SIPC's purpose, and I believe it does help when a brokerage firm goes bankrupt.

Mendy 1 year ago

I think I remember that the SIPC is similar to the FDIC, but I'm not sure if that's the right way to explain it.

Tawna 1 year ago

The SIPC was established by an Act of Congress to protect investors against losses in the stock and bond market. That sounds like the most comprehensive and accurate description to me.

Alisha 1 year ago

Wait, I thought the SIPC was a government agency created to combat fraud. I'm a little confused now - I'll have to think this through carefully.

Lovetta 1 year ago

Okay, I've got this. The SIPC is like the FDIC but for the stock and bond markets. It's there to restore funds to investors if their brokerage firm goes bankrupt. I'm pretty confident that's the right answer.

Bernardo 1 year ago

Hmm, I'm a little unsure about this one. I know the SIPC has something to do with protecting investors, but I'm not totally clear on the details. I'll have to review my notes.

Gail 1 year ago

This question seems pretty straightforward. I think the key is to focus on the key facts about the SIPC and what it does.

Finra Series-63 Exam - Topic 7 Question 4 Discussion