Most brokers hold your stocks in "street name". That means your stocks are owned by the brokerage according to the books of DTCC (an entity that keeps track of who owns what stocks) as well as the company (in which you own stocks). Your ownership is only reflected in the books of your broker. So if your broker went bust and had no stocks to give you, you'd be screwed. That's where SIPC comes in - they will guarantee that you get those stocks.
Beware though, the SIPC will only give you the AAPL shares with some delay (say 1-2 months) but it won't guarantee any losses in the value of those AAPL shares in the meanwhile (even though you have no way to sell them).
SIPC also specifically does NOT prevent against employee fraud at your broker. That is a separately covered by something called a "fidelity bond".
The SIPC insures 500k worth of equity, options, cash, bonds and mutual funds positions (but not Futures). Cash is limited to 250k
Some brokers like Fidelity have an insurance coverage over and above SIPC
IPUPVP t1_jear55k wrote
Reply to Multiple 401k accounts to protect assets? by corner
Most brokers hold your stocks in "street name". That means your stocks are owned by the brokerage according to the books of DTCC (an entity that keeps track of who owns what stocks) as well as the company (in which you own stocks). Your ownership is only reflected in the books of your broker. So if your broker went bust and had no stocks to give you, you'd be screwed. That's where SIPC comes in - they will guarantee that you get those stocks.
Beware though, the SIPC will only give you the AAPL shares with some delay (say 1-2 months) but it won't guarantee any losses in the value of those AAPL shares in the meanwhile (even though you have no way to sell them).
SIPC also specifically does NOT prevent against employee fraud at your broker. That is a separately covered by something called a "fidelity bond".
The SIPC insures 500k worth of equity, options, cash, bonds and mutual funds positions (but not Futures). Cash is limited to 250k
Some brokers like Fidelity have an insurance coverage over and above SIPC