broker-dealer


broker-dealer
USA
Most securities firms function as both a broker and dealer, so they are referred to as broker-dealers.
A broker is any person engaged in the business of effecting transactions in securities for the account of others in exchange for a fee or commission (see Section 3(a)(4)(A) of the Exchange Act). A broker acts as an agent only for someone else, buying or selling securities on a securities exchange for a commission.
A dealer is any person regularly engaged in the business of buying or selling securities, either for his own account or for the accounts of others (see Section 2(a)(12) of the Securities Act and Section 3(a)(5)(A) of the Exchange Act). Unlike a broker, who only acts as an agent for a customer in exchange for a commission, a dealer may also act as a principal by dealing in securities for his own inventory as part of his regular business.
Broker-dealers are subject to regulatory oversight by the SEC and must also register with a self-regulatory organization. Broker-dealers may also be subject to state regulation.
Related terms

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

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  • Broker-dealer — A broker dealer is a company that trades securities for customers as well as for its own account. In the United States, a broker dealer has to be registered with the Financial Industry Regulatory Authority. When executing trade orders on behalf… …   Wikipedia

  • broker-dealer — noun a financial specialist who trades for his own account and so acts both as a broker and principal • Hypernyms: ↑principal, ↑dealer * * * ˈbroker dealer f54 [broker dealer broker dealers] noun …   Useful english dictionary

  • Broker-Dealer — A person or firm in the business of buying and selling securities operating as both a broker and a dealer depending on the transaction. Technically, a broker is only an agent who executes orders on behalf of clients, whereas a dealer acts as a… …   Investment dictionary

  • broker-dealer — UK / US noun [countable] Word forms broker dealer : singular broker dealer plural broker dealers business a person or company that buys and sells stocks, shares, or goods for other people …   English dictionary

  • broker/dealer — See dealer Exchange Handbook Glossary An Exchange member firm, which provides advice and dealing services to the public and can deal on its own account. London Stock Exchange Glossary …   Financial and business terms

  • broker-dealer — /ˌbrəυkə di:lə/ noun a dealer who makes a market in shares (i.e. buys shares and holds them for resale) and also deals on behalf of investor clients …   Dictionary of banking and finance

  • broker-dealer — noun (in the UK) a person combining the former functions of a broker and jobber on the Stock Exchange (now the official term on the UK Stock Exchange) …   English new terms dictionary


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