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Nicholas Beh
17 Aug 2020
Student Ambassador 2020/21 at Seedly
First of all, brokers are required to hold customers' securities in custodian accounts, which are separate from their funds used for day-to-day operations.
If that fails, there's the SIPC which insures individual investors up to 500,000 USD in equity and cash deposits. Most, if not all US brokers are SIPC members.
The tricky part is that the overseas subsidiaries of US brokers are not SIPC members. I am not a lawyer, so I can't advise anything... but the brokers I use give me sufficient confidence for me to continue using their services.
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