IMPORTANT SIPC FACTS ABOUT MONEY MARKET FUNDS FOR CANDIDATES TAKING THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE)
If you plan to take the Securities Industry Essentials (SIE) Exam, you should make sure that you study and know about the rules of Securities Investor Protection Corporation, or SIPC. Why do you need to know about SIPC? The answer is that rules of SIPC are included in FINRA's Content Outline for the SIE Exam. You need to know what is covered by SIPC protection, how it is covered, and to what extent. For example, are money market funds covered? Here is what SIPC itself says about money market funds: "ARE MONEY MARKET MUTUAL FUNDS PROTECTED BY SIPC? ARE THEY SUBJECT TO THE $250,000 CASH LIMIT? "Money market mutual fund shares held in a customer’s account at a brokerage firm qualify as “securities” under the Securities Investor Protection Act (SIPA) and therefore are subject to the $500,000 limit of protection, not the $250,000 limit applicable to cash. It is important to remember that, although many investors treat money market funds like cash, they are securities and, as...