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Related to Broker-dealer: brokerage, Series 7


Any person, other than a bank, engaged in the business of buying or selling securities on its own behalf or for others. See: Dealer.


A person or, more often, a firm that acts as a broker for some transactions and a dealer for others. That is, as a broker, he/she conducts transactions on behalf of clients, and, as a dealer, he/she trades on his/her own account. In practice, most brokerages are in fact broker-dealer firms. Most broker-dealers must register with the SEC.


A firm that functions both as a broker by bringing buyers and sellers together and as a dealer by taking positions of its own in selected securities. Many firms that are commonly called brokers or brokerage firms are actually broker-dealers.


A broker-dealer (B/D) is a license granted by the Securities and Exchange Commission (SEC) that entitles the licensee to buy and sell securities for its clients' accounts. The firm may also act as principal, or dealer, trading securities for its own inventory.

Some broker-dealers act in both capacities, depending on the circumstances of the trade or the type of security being traded. For example, your order to purchase a particular security might be filled from the firm's inventory.

That's perfectly legal, though you must be notified that it has occurred. B/Ds range in size from independent one-person offices to large brokerage firms.

References in periodicals archive ?
For the broker-dealer provisions to be applicable, the statute requires the taxpayer to be a registered securities or commodities broker-dealer, as defined to mean a broker or dealer registered as such by the Securities and Exchange Commission (SEC) or the Commodities Futures Trading Commission (CFTC).
If you bring up this model to a broker-dealer executive or staff member that has a standard payout grid to advisory business, heated opinions will likely start to roll off his or tongue: "That model is not profitable," or "That firm has been looking for a buyer for years but no one wants them because they aren't profitable," or "How can they offer 100% on advisory if they are liable for the risk?
Many larger teams are departing broker-dealer firms to become independent.
For example, a clearing firm commonly charges $1 for postage and handling fees, and the broker-dealer charges between $4 and $7.
Chief among them is the fact that if a client's bond portfolio is constructed with bonds from a broker-dealer, the client likely will pay more for the bonds because of higher markups attached to such bonds.
This minimal approach is by far the most service-friendly, as advisor touch points stay within their own broker-dealer and culture remains intact.
On recruiting, the study reported that over the last five years, competition for top advisor talent has led to sharp increases in recruiting bonuses and higher payouts for recruits, but the "winners" in those highly competitive recruiting wars may in fact be losers over the longer term, since those incentives "may cause permanent damage to the economics of the winning broker-dealer.
A registered investment adviser has a fiduciary responsibility to work in the client's best interest; the broker has a fiduciary responsibility to the broker-dealer.
When a banking organization conducts securities activities outside the bank, through a subsidiary or an affiliate that is a broker-dealer, it is subject to the jurisdiction of both the banking agencies and the securities regulators.
The advisor went to the president of the broker-dealer, who assured him that everything was fine, that they had not lost numerous reps and all was in excellent order.
He shared a story about the president of his former broker-dealer who seemed fixated on pleasing upper management of the insurance parent company.