Are shares under my name if I purchased them via my broker?

What if my broker goes out of business? That should have no effect on my shares because I own those shares. They are already bought and paid for, right?

The country is USA. The broker is Fidelity.

  • I'm sure this question has been asked and answered before on this site.
    – RonJohn
    Jan 3 '21 at 3:46
  • 1
    Depends on the country, exchange, broker, etc. We can't say without you telling us more. Jan 3 '21 at 3:55
  • @curiousdannii I have added those info. Jan 3 '21 at 3:56
  • I googled "what happens to my stock if a broker goes bankrupt", and got a bunch of hits, all saying the same thing.
    – RonJohn
    Jan 3 '21 at 4:01

When you own stocks or bonds in a brokerage account, they are held in "street name". IOW, the name that appears on the security is that of the broker but you retain ownership rights. This facilitates speedy trading and reduces trading costs.

SIPC protection is $500,000, which includes a $250,000 limit for cash. SIPC protects the custody function of the broker dealer so if your broker goes out of business, your securities are safe.

SIPC does not protect you from your securities dropping in price nor does it protect you from receiving bad advice from a broker.

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