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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 ?
To this end, only taxpayers who themselves are registered securities broker-dealers can apply the broker-dealer special sourcing provisions to their receipts.
New DOL rules are also causing broker-dealers to implement more conservative compliance policies that many advisors find too restrictive.
Industry changes continue to increase the possibility that successful teams will part ways with broker-dealers.
For example, on mutual funds and variable annuities, broker-dealers will negotiate with vendors to earn basis points (bps) on assets or sales of products their reps sell.
Customer protection concerns today are more reliably addressed by other regulations and policies applicable to the issuance and distribution of securities and to the conduct of broker-dealers.
The broker-dealers benefit from cost savings by centralizing these services.
Using FINRA data, FA Insight reported that 863 broker-dealers closed their doors from year-end 2007 through May 2014, bringing the total number of BDs to 4,142.
Partnering is better than trading directly with broker-dealers for a number of other reasons as well.
With that information, broker-dealers could better fulfill the 'risk-based' approach to compliance encouraged by the NASD and the SEC that focuses resources on the most frequent sources of wrongdoing.
For example, the Board has permitted bank holding companies to own nonbank "section 20 affiliates," which are registered broker-dealers subject to SEC oversight that engage in a very limited volume of underwriting and dealing of corporate securities as well as other securities activities permissible for banks.
The need to do financial and regulatory due diligence is greatest when looking at small to mid-sized broker-dealers,unless the broker-dealer has a deep-pocket parent company as financial backing.