What specific item must a member firm indicate on a purchase confirmation sent to a customer?

A purchase confirmation sent to a customer by a member firm must clearly indicate certain specific information to ensure compliance with regulations and to promote transparency. One key item that must be included in the confirmation is the firm's membership status in the Securities Investor Protection Corporation (SIPC).

This is significant because SIPC provides limited protection to customers in the event that a member firm fails. By indicating their membership status, the firm informs customers whether their investments are protected under SIPC rules. If a firm is not a member, customers would be aware that their funds may not have that additional layer of protection, which is crucial for making informed decisions regarding their investments.

Including this information helps maintain trust between the firm and its clients and complies with regulatory requirements, ultimately facilitating a better understanding for the customer about the risk associated with their investment.