What's What in the Financial Services Industry


Broker-Dealer Firm

Definition: a firm in the business of buying and selling securities operating as both a broker and a dealer depending on the transaction. Technically, a broker is only an agent who executes orders on behalf of clients, whereas a dealer acts as a principal and trades for his or her own account. Because most brokerage firms have both brokers and principals, the term broker-dealer is commonly used to describe them.

Regulated by: on the federal level, broker-dealer firms are regulated by the Financial Industry Regulatory Authority (FINRA); on the state level, they are regulated by the Indiana Securities Division

Standard of care: suitability responsibility



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