Does SIPC protect securities that are rehypothecated because you have a margin balance?

External question — Personal Finance Stack Exchange Author: Joseph Sible-Reinstate Monica Original post: https://money.stackexchange.com/questions/166826 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I know that if you're enrolled in Fully Paid Securities Lending, any shares that are lent out through it if your brokerage fails won't be protected by SIPC. Even if you aren't participating in Fully Paid Securities Lending, though, if your account has a margin balance, brokers can lend out up to 140% of your margin balance worth of your shares anyway under rehypothecation. If the brokerage fails while you have a margin balance, will all of your shares still be protected, or will the ones that were rehypothecated at the time be excluded from the protection?