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What if the Clearing Broker fails?

In the US, if a brokerage firm ceases to operate, the assets of their clients are normally transferred in an orderly manner to another registered brokerage firm. In addition, the Clearing Broker is required to keep their clients’ securities and money separate from their own so that even if the Clearing Broker fails, their clients' assets are safe. Brokers are also required to meet minimum net capital requirements to reduce the likelihood of insolvency and to be a member of the Securities Investor Protection Corporation, which protects client securities accounts of up to US$500,000.

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