Good afternoon everybody!
I
know there have been several discussions about how safe your assets are
that are currently being held by various financial institutions. We
just posted the following details to scottrade.com regarding your
Scottrade held accounts. I wanted to post it here in the community as
well.
(I also posted this as a discussion thread in case some of you want to 'discuss' it. )
How Scottrade Protects Your
Accounts
We
have witnessed a number of unprecedented and startling changes in the financial
markets recently, causing many people to more closely examine their assets and
the firms where those assets are held. Account protection at Scottrade is our
top priority. We value the trust you have placed in Scottrade and are dedicated
to providing the best service and trading experience as you navigate through
this market.
In
light of what is happening at some other financial institutions, how has
Scottrade been affected?
Scottrade remains stable and secure. Many
of the problems faced by other financial institutions have been the result of
heavy mortgage-related losses. Scottrade does not invest in mortgage-backed
securities. We handle our customers’ funds with great care, including complying
with the SEC’s customer protection rule and depositing customer funds as
required by the rule in special reserve bank accounts for the benefit of our
customers. In these accounts, we hold a combination of U.S. Treasury securities,
which are backed by the full faith and credit of the U.S. government, and cash
deposits. The banks at which we hold these accounts are stable and are not among
those that have been in the news. We are very comfortable with these banks as
stewards of our customers’ funds. We also maintain more net capital – in fact
four times as much as of August 2008 – than the SEC’s minimum
requirements.
Scottrade remains strong. We continue to
open new branch offices across the country and more than 1,000 customers are
opening new accounts with us every day. We are confident that we will continue
to provide you with our industry-leading services, no matter what comes next in
the financial markets.
For
more about Scottrade’s financial stability, please visit www.scottradefinancials.com.
How
is my account protected?
The
financial services industry has multiple layers of protection in place to
safeguard customer assets. Details regarding this protection, including
information about the Securities Investor Protection Corporation (SIPC), are
available from the Financial Industry Regulatory Authority (FINRA) by visiting
http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/P116996.
Scottrade is a member of the Securities
Investor Protection Corporation (SIPC), and brokerage accounts that Scottrade
maintains are protected by SIPC. SIPC protects securities held by investors up
to $500,000, including a maximum of $100,000 in cash claims. More information
about SIPC protection is available at www.sipc.org.
In
addition to SIPC coverage, Scottrade has purchased excess coverage (excess SIPC)
from Lloyd’s of London of $24.5 million (including $900,000 in cash claims) to
pay amounts in excess of those returned in a SIPC claim, subject to an aggregate
Scottrade limit of $100 million. Taking into account SIPC and excess SIPC
coverage, the Total Investor Protection is $25 million including up to $1
million in cash.
SIPC
coverage is not the same as the insurance on bank accounts provided by the
Federal Deposit Insurance Corporation (FDIC). In order for cash to be covered by
SIPC or excess SIPC, cash held in an account must be for the purpose of, or as a
result of, securities transactions. Cash held in a securities account for the
purpose of earning interest, which was not the result of a securities
transaction, may not be covered by SIPC or excess SIPC.
How
is my Information protected by Scottrade?
are
committed to protecting your personal information. In the rare event that you
encounter fraudulent activity on your Scottrade account, we will reverse
eligible online fraudulent transactions in your account at no cost to you as
part of our Online Security Guarantee, provided that certain conditions are met.
For information about steps Scottrade has taken to ensure your privacy and
security, please visit www.scottrade.com/security.
If you
have any questions, please call your local branch office at 800-619-7283 or
e-mail us at support@scottrade.com.
(more)
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