16th Nov 2009 by Joseph Pousada
A securities broker is a person / organization who brings a buyer and seller together for a particular security. In the United States the representative and the brokerage firm would need to be licensed by FINRA (Financial Industry Regulatory Authority) to place orders on behalf of customers. There are various specialized licenses but, the most comprehensive one offered by FINRA for representatives is the series 7 and includes stocks, bonds, investment companies and options. It is important to note that many firms are “broker / dealers” in which they act in both capacities in that the order may be executed by bring together a buyer or seller (acting in the capacity of a broker) or may be executed against the firms’ house account (acting in the capacity of a dealer). If you wish to have your order done between buyer and seller in the market (not against the firms’ house account) ask your broker/dealer to manually entering trades specifying that it be done on an agency basis as many can now accommodate this.
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