Unless you (or your broker) take delivery of the actual stock certificates, they are held "In street name". You are supposed to be listed as beneficial owner.
FIDC $100k Cover at the bank
- Thread starter Digs
- Start date
Unless you (or your broker) take delivery of the actual stock certificates, they are held "In street name". You are supposed to be listed as beneficial owner.
I dont see what this has to do with it.
I guess no one knows the answer.
I suspect that if the broker or clearing firm goes bust they do in fact use customers assets to pay off the "big boy" creditors and the customers get the chump change.
I dont see what this has to do with it.
I guess no one knows the answer.
I suspect that if the broker or clearing firm goes bust they do in fact use customers assets to pay off the "big boy" creditors and the customers get the chump change.
OK here's the way it works:
Margin debt has nothing to do with SIPC...Margin should never get negative but if it did and neither the introducing firm nor the clearing firm could cover it then...SIPC starts taking bids.
Any debt held by Penson is part of their Net Cap computation...regardless as to whether its related to brokerage accounts or not...IE: Say a disgruntled firm sues them in arbitration for 50 million and WINS...that 50 million goes immediately against their net cap....if they only have say 40 Million in net cap? they are under by 10 million and SIpc steps in and starts taking bids...NOW....your account will be restricted from buying new position but a trustee will administer sell orders while they determine who gets the accounts...your Stock is held at DTC not penson...Your $$ is held by a bank and DTC handles the reserving for credit and debit balances.
Bob, unfortunately for me, I just went through a situation where my credit union went into insolvency ( they didn't let me know until a year after the fact
). During this time NCUA ( FDIC sister ) was looking for another credit union to take over the remaining assets and they found one, thanks goodness. I ended up keeping all my funds and the experience rings similar with what TM said would happen in the FDIC situation. I ended up becoming a default member of the new credit union.It is also similar to customers of REFCO, who had segregated futures accounts that became customers of MAN now MF Global.
