Broker-Dealer

Definition:

A person or firm in the business of buying and selling securities for themselves or on behalf of others and, depending on the transaction, operating as both a broker and a dealer.

All Broker-Dealers effecting transactions in securities in the United States must register with the US regulator of Broker-Dealers, FINRA, and the state in which they do business, and are subject to the Broker-Dealer rules under the Exchange Act.

Broker-Dealers are broadly defined under Section 3(a)(4)(A) of the Exchange Act which defines “broker” as “any person engaged in the business of effecting transactions in securities for the account of others.”

See also Chaperone Agreement and Placing Agreement.

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