About account insurance
In the USA, the SIPC corporation insures money and securities on brokerage accounts for up to USD 500 thousand, of which cash does not exceed USD 250 thousand. For example, if an investor had 70 thousand dollars in securities and 300 thousand dollars in free money on his account, you can get only 320 thousand under insurance, not 370.
What and how does SIPC insure
The broker must be a member of the SIPC. The insurance covers not only US citizens and residents, but also foreigners.
European brokers also have insurance, but its limit is much lower than in the USA. For example, in the UK, FSCS can compensate up to £ 50,000 if an investment company stops operating between January 1, 2010 and March 31, 2019, or up to £ 85,000 if it happened after April 1, 2019.
The insurance system works if the broker has lost clients’ assets. The insurance does not cover price fluctuations because it is a common investment risk. In other words, if the stocks you bought fall in price or a default is declared on bonds, you should not count on insurance.
In Russia, brokerage accounts and IIS are not insured. In June 2017, the State Duma adopted in the first reading a bill on IIA insurance, but further matters did not progress.
Bill No. 76910-7 “On Insurance of Individuals’ Investments in IIS”
You have to choose brokers more carefully and keep an eye on your assets.