Registered representative


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Registered representative

A person registered with the CFTC who is employed by and solicits business for a commission house or futures commission merchant.

Broker

A person or firm that conducts transactions on behalf of a client. Some brokers only conduct transactions while others also offer different types of investment advisory services. Brokers derive their profit from commissions on orders given. That is, they usually collect a percentage of the value of each transaction, though some charge flat fees. Clients may give orders in a variety of ways. One may meet with a broker, call on the telephone, or give orders over the Internet. Brokers handle two main types of brokerage accounts: advisory accounts and discretionary accounts. Brokers are only allowed to conduct transactions on advisory accounts on the specific orders of the account holder, or under very specific instructions. On the other hand, they have much more leeway over discretionary accounts, conducting transactions not prohibited by the account holder in accordance with the holder's investment goals and the prudent man rule. In practice, most brokerage firms are in fact broker-dealer firms. Most brokers must register with the SEC.

registered representative

An employee or a partner in a brokerage firm who is registered to handle customer accounts. Also called account executive, broker, customer's man, stockbroker.

Registered representative.

Registered representatives are licensed to act on investors' orders to buy and sell and to provide advice relevant to portfolio transactions.

They may be paid a salary, a commission, usually a percentage of the market price of the investments their clients buy and sell, or by annual fee figured as a percentage of the value of a client's account.

Registered reps work for a broker-dealer that belongs to the exchange or operates in the market where the trades are handled. The reps must pass a series of exams administered by NASD to qualify for their licenses and are subject to NASD oversight.

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