How Your Brokerage Accounts are Protected by SIPC and Morgan Keegan
At Morgan Keegan, your accounts are protected by the Securities Investor Protection Corporation (SIPC), a member-supported organization created by Congress in 1970 to provide certain financial protection to clients should a brokerage firm become insolvent. Additionally, Morgan Keegan has for many years purchased supplemental protection, significantly raising the level of coverage for our clients.
Understanding the Role of SIPC
SIPC is your first line of defense in the event of a brokerage firm failure. No fewer than 99% of eligible investors get their investments back from SIPC. When a brokerage firm is closed due to bankruptcy or other financial difficulties, the Securities Investor Protection Corporation steps in as quickly as possible and, within certain limits, works to return to you cash, stock and other securities you had at the firm.
You should also understand that SIPC is not the FDIC. The Securities Investor Protection Corporation does not offer to investors the same blanket protection that the Federal Deposit Insurance Corporation provides to bank depositors. SIPC helps individuals whose money, stocks and other securities are put at risk when a brokerage firm fails for any reason.
What SIPC Covers and What It Does Not
The cash and securities – including stocks, bonds, notes, CDs, and money market funds – held in your accounts at Morgan Keegan are protected by SIPC up to stated limitations ($500,000 maximum per eligible client, of which $100,000 may be cash).
SIPC coverage does not protect against losses from market fluctuations in portfolio value. Certain investments are ineligible for SIPC protection, such as commodity and futures contracts, as well as investment contracts (such as limited partnerships) that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.
More detailed information about the Securities Investor Protection Corporation is available online at www.sipc.org, or you may request a SIPC brochure from your Morgan Keegan financial advisor.
Supplemental Protection Provided by Morgan Keegan
In July 2006, the protection that Morgan Keegan provides in excess of SIPC coverage changed. The new supplemental coverage obtained through Lloyd’s of London is provided at no cost to you. The per account limitation of this coverage will be $124,500,000 for all Morgan Keegan accounts, subject to an overall aggregate loss limit of $400 million.
The supplemental coverage follows the same guidelines which apply for the SIPC coverage as outlined above. In the unlikely event that client assets are not fully recovered and SIPC protection limits have been paid, the supplemental protection takes effect. If you maintain more than one account with Morgan Keegan in separate capacities (i.e. individually, jointly, as a trustee), each account is protected by SIPC and the excess coverage up to the client and aggregate limits set forth.
About Lloyd’s of London
Lloyd’s of London is the world's leading specialist insurance market and has the capacity to write approximately £15.95bn of business in 2008. It occupies sixth place in terms of global reinsurance premium income, and is the second largest surplus line insurer in the U.S. In 2008, 75 syndicates are underwriting insurance at Lloyd's, covering all classes of business from more than 200 countries and territories worldwide.
At Morgan Keegan, the well-being of our clients is our utmost concern. We thank you for the privilege of being your financial partner and look forward to continuing to serve your needs.
