member firm(redirected from Member Corporation)
Used for listed equity securities. Brokerage firm that has at least one membership on a major stock exchange even though, by exchange rules, the membership in the name of an employee and not of the firm itself.
A broker-dealer firm in which at least one of the principal officers is allowed to trade on the floor of an exchange. To become a member, one needs to purchase a membership or a seat on the exchange, which can be very expensive. There are usually a set number of memberships to an exchange; for example, on the New York Stock Exchange, there are 1,366 seats, which may cost up to $1 million each, and which may be bought or sold to different firms. Most exchanges do not recognize member firms, only individual members; that is, they consider members to be the brokers or dealers on the floor, rather than the firms they represent.
A securities firm with officers or partners who are members of an organized securities exchange. National brokerage firms are generally members of a number of organized exchanges. Organized exchanges have established standards of conduct and financial conditions. See also ABC Agreement.