What is the primary purpose of the SIPC?

The primary purpose of the Securities Investor Protection Corporation (SIPC) is to protect investors' funds in the event of a broker-dealer bankruptcy. This function is particularly critical in providing a safety net for customers who have cash and securities at a firm that becomes unable to fulfill its obligations due to insolvency. The SIPC's protective measures are designed to recover and return customers' assets, within a specified limit, ensuring that investors do not lose their funds outright due to circumstances beyond their control.

By offering this protection, SIPC plays a vital role in maintaining investor confidence in the financial markets. This assurance encourages more people to engage in investing, knowing that their funds are safeguarded against potential failures of brokerage firms.

The other options represent activities or purposes that are outside the scope of SIPC's responsibilities. For instance, issuing municipal bonds, regulating options trading, and managing the enforcement of securities laws are functions typically handled by other entities, such as state governments or the Securities and Exchange Commission (SEC). Therefore, the correct choice highlights SIPC's specific and crucial role in investor protection.