Filings & regulation
Investor compensation scheme
Also called SIPC or FSCS
A statutory scheme that compensates clients up to a limit if a regulated firm fails.
How it works
Schemes cover the failure of the firm itself — missing client assets, fraud, insolvency — up to a per-person cap that varies by country.
They do not cover investment losses. A holding that falls in value is not a claim, however unpleasant.
Where it misleads people
Coverage applies per firm, so holding everything at one broker concentrates the exposure. It also frequently does not extend to assets held through non-domestic entities.
Related terms
- BrokerThe firm that holds your account and sends your orders to the market on your behalf.
- CustodianThe institution that physically safeguards the securities you own.
- Nominee accountAn arrangement where your broker is the registered owner of your shares and you are the beneficial owner.
- Counterparty riskThe risk that the other side of a contract fails to do what it promised.
Mentioned in
More in Filings & regulation
- Institutional investor
- Material event filing
- Insider dealing and disclosure
- Material information
- Form 13F
- Quarterly report
- Financial statements
- Regulatory filing
All 12 Filings & regulation terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.