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Online Broker-Dealers

Survey shows that most of the people are not aware about the meaning of the term Broker-dealer. Well, let us try to understand the meaning of the term, which is the purpose of this page.

A Broker-dealer is an individual or firm who buys and sells securities for himself and others. When acting as a broker, a broker-dealer online carries out the orders on behalf of his/her client, but when acting as a dealer, a he executes trades for his/her firm's own account. Securities which are bought for the firm's own account may be sold to clients or other firms. They can also become a part of the firm's holdings.

Most online Broker-dealers are "independent" firms, dealing with broker-dealer services. But some may be business units or subsidiaries of commercial banks, investment banks or investment companies. As most brokerages act as both brokers and principals, the term broker-dealer is commonly used to describe them. What is interesting about Broker-dealers is that don’t get paid to provide advice. Hence, they can’t be called "advisors" truly. These individuals are salesmen and get paid only when they sell a product.

Broker-dealers online are well known for their work on complex and cutting-edge issues. Having the ability to develop creative and innovative solutions to regulatory issues, a good online broker-dealer is efficient in providing cost effective counseling on new regulatory requirements.

The broker-dealers are regulated under the Securities Exchange Act of 1934 by the Securities and Exchange Commission (SEC) in the US.

 
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