A broker-dealer (B-D) is an entity, whether an individual or a firm, engaged in the buying and selling of securities. In U.S. securities regulation, the term broker-dealer is commonly used to describe stock brokerage firms. These entities operate both as agents and principals in securities transactions. When executing orders on behalf of clients, a brokerage firm acts as a broker or agent. Conversely, when trading for its own account, it functions as a dealer or principal. Broker-dealers play a crucial role in facilitating securities transactions in financial markets.
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