A broker-dealer is a financial firm that acts as both a broker and a dealer. As a broker, the firm facilitates transactions between buyers and sellers of securities. As a dealer, the firm buys and sells securities for its own account. Broker-dealers play a crucial role in the securities markets by connecting buyers and sellers and providing liquidity to the market. They also offer services such as underwriting new securities, providing market research and analysis, and offering investment advice to their clients. Some broker-dealers are large, full-service firms that offer a wide range of products and services, while others specialize in specific areas of the market. The activities of broker-dealers are regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Broker-dealers are financial firms or individuals that buy and sell securities like stocks and bonds on behalf of clients and for their own accounts. As brokers, they act as intermediaries, executing trades for investors and earning commissions. As dealers, they trade securities for their own profit, known as the “spread” between buying and selling prices. Broker-dealers play an essential role in maintaining market liquidity and efficiency by connecting buyers and sellers. They are regulated by financial authorities such as the SEC and FINRA in the United States to ensure transparency, protect investors, and prevent market manipulation. Many brokerage firms, investment banks, and trading platforms operate as broker-dealers to serve both retail and institutional clients.