What Is Broker-Dealer?
A firm (or person) in the business of buying and selling securities. It acts as a broker (agent) when executing trades on a customer's behalf for a commission, and as a dealer (principal) when trading securities from its own inventory for a markup or markdown.
Broker-Dealer across 6 exams
Broker-Dealer appears on the following exams. Each defines it in the context candidates are tested on:
- SIE
- A firm (or person) in the business of buying and selling securities. It acts as a broker (agent) when executing trades on a customer's behalf for a commission, and as a dealer (principal) when trading securities from its own inventory for a markup or markdown.
- Series 65
- A person or firm in the business of effecting securities transactions for the accounts of others (broker) or for its own account (dealer). Broker-dealers must register with states and are generally held to a suitability standard rather than a fiduciary standard.
- Series 63
- A person engaged in the business of effecting securities transactions for the accounts of others or for its own account; excludes agents, banks, and firms with no place of business in the state that deal only with certain exempt clients.
- Series 66
- A person or firm engaged in the business of effecting securities transactions for the accounts of others (broker) or for its own account (dealer). Broker-dealers must register with both state and federal regulators.
- Series 24
- A firm or person in the business of buying and selling securities either for customers (broker) or for its own account (dealer). Series 24 principals supervise the operations of such firms.
- Series 99
- A registered firm that buys and sells securities for its own account or on behalf of customers. Broker-dealers must comply with SEC and FINRA rules and employ operations professionals to handle back-office functions.