Securities Account Protection
Customer securities accounts at TRADEX are protected up to $30 million (including up to $1 million for cash). The market value of your stocks, options, warrants, debt, and cash -- denominated in all currencies -- is covered by this insurance. Futures, options on futures, and single stock futures are not covered, but available cash will be swept from your futures account to your securities account periodically to take advantage of insurance coverage as much as possible. As with all securities firms, this insurance provides protection against failure of a broker-dealer, not against loss of market value of securities.
This protection is provided by the Securities Investor Protection Corporation (SIPC) and Lloyd’s of London insurers. SIPC provides the first $500,000 per customer (including up to $100,000 for cash). For customers who have received the full SIPC protection, the Lloyd’s policy provides up to an additional $29.5 million (including $900,000 for cash), subject to an aggregate limit of $150 million.
For the purpose of determining a customer account, accounts with like names and titles (e.g. Individual/John Smith and Individual/John Smith) are combined, but accounts with different titles are not (e.g. Individual/John Smith and IRA/John Smith).
SIPC is a non-profit, membership corporation funded by broker-dealers that are members of SIPC. For more information about SIPC and answers to frequently asked questions (such as how SIPC works, what is protected, how to file a claim, etc.), please refer to the following websites:
http://www.nasdr.com/sipc_protection.htm
or contact SIPC at:
Securities Investor Protection Corporation
805 15th Street, N.W. - Suite 800
Washington, D.C. 20005-2215
Telephone: (202) 371-8300
Facsimile: (202) 371-6728
Lloyd’s of London is a world leader in the insurance industry.
Securities Account Protection FAQs
How is the “per client” coverage applied if I maintain multiple accounts with TRADEX?
Multiple accounts maintained in the same name and taxpayer ID number are grouped for purposes of applying the maximum per client protection limits of $500,000 by SIPC and $29.5 million under Lloyd’s supplementary protection. However, if you hold accounts with TRADEX in separate capacities (for example, an account in your name, a trust account of which you are the trustee or a beneficiary, or a joint account), then each account would be protected by SIPC and the supplementary protection up to the stated limits.
How does the aggregate loss limit affect the protection of my account?
TRADEX’s supplementary protection from Lloyd’s of London is subject to an aggregate loss limit of $150 million. This is the maximum amount available to cover TRADEX’s customers in excess of SIPC protection. In the unlikely event of a financial failure of the firm coupled with client assets not being fully recovered, SIPC (or a trustee appointed by the federal courts) would advance funds to each eligible client (for more details visit http://www.SIPC.org). Because most accounts maintain less than $500,000 in net equity, SIPC protection would cover the large majority of customer assets held by TRADEX. In the extremely unlikely event of a total loss of customer assets, the supplementary protection would be needed to cover a relatively small portion of the total net customer equity held by TRADEX. Although possible, it is improbable that the aggregate loss limit would be reached. However, if the supplementary protection fell short of covering all customer assets, the coverage would be allocated on a pro rata basis to the client accounts that required protection.
