A broker-dealer is a financial firm (or individual) registered with regulators to do two related jobs:
- Broker: acts as an agent for clients by buying or selling securities on the client’s behalf (typically earning a commission or fee).
- Dealer: acts as a principal by buying and selling securities for its own account (earning money from the spread/markup between buy and sell prices).
In the U.S., broker-dealers are generally regulated by the SEC and must be members of FINRA (and/or other SROs), depending on their activities
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