A nonprofit corporation is an organization legally constituted and operated to serve a public or mutual benefit, rather than to pursue or distribute profits to its directors, members, or shareholders.
The Securities Investor Protection Corporation (SIPC) is a nonprofit corporation supported by its membership of securities brokers and dealers. It was developed to protect their customers and to promote confidence in the securities markets. In principle, SIPC provides certain amounts of insurance on cash and securities left on deposit in a brokerage account. This insures investors against the failure of the brokerage firm but not against a decline in the value of securities.
