Broker-Dealer
A firm that both executes trades for clients (broker) and trades for its own account (dealer).
In plain English
A firm that both executes trades for clients (broker) and trades for its own account (dealer).
A broker-dealer wears two hats. As a broker, it handles customer orders for a fee. As a dealer, it buys and sells for itself, often taking the other side of clients' trades.
The term is mostly used in US securities regulation. The dual role can create conflicts of interest, which is why such firms are registered and supervised.
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