Investments and cash in your Sarwa Trade account are generally protected by SIPC insurance up to $500,000 (including $250,000 for cash), subject to eligibility under US regulations.
Securities loaned through the FPSL program are not covered by SIPC protection. Instead, Alpaca secures your loaned securities with cash collateral, maintained at a minimum of 100% of the securities’ value, held at a third-party bank. In rare and extreme situations, this collateral might not fully cover the value of your loaned securities. If Alpaca were to become insolvent and unable to return your securities, the collateral would be used to compensate you. Additionally, the cash collateral held at the third-party bank may be covered by FDIC insurance up to $250,000, depending on the bank’s policies and FDIC rules.
Before enrolling in the FPSL program via your Sarwa Trade account, you should carefully review the Alpaca risk disclosures and MSLA to make sure you accept the terms and risks associated with your participation in the FPSL program.