Which of the following assets is not covered under the SEC ' s Customer Protection...

The correct answer is C, $250,000 in cash in the customer ' s savings account. The SEC’s Customer Protection Rule (Rule 15c3-3 under the Securities Exchange Act of 1934) is designed to protect customer funds and securities held by broker-dealers, not assets held at banks.

Step-by-step, the rule requires broker-dealers to segregate customer securities and maintain a reserve of cash or qualified securities to safeguard customer assets in case the firm fails. This includes securities like stocks and bonds (Choices A and B), which are held in brokerage accounts and therefore fall under the rule’s protection.

Choice D, excess margin, is also covered because it represents customer funds held by the broker-dealer beyond what is required for margin purposes. These funds must be included in the reserve computation and are protected under the rule.

However, Choice C refers to cash held in a bank savings account, which is not under the custody of a broker-dealer. Instead, such deposits are typically protected by FDIC insurance, not the SEC’s Customer Protection Rule.

Therefore, assets held outside a brokerage relationship—like bank savings—are not covered by the Customer Protection Rule, making Answer C correct.