Series 63 practice questioneasyDefinition of broker-dealer
Under the Uniform Securities Act (USA), which of the following best describes a broker-dealer?
- AA firm in the business of effecting securities transactions for its own account or the accounts of others.✓ Correct answer
- BAn individual who represents a broker-dealer in effecting securities transactions.
- CAny issuer of securities.
- DA bank that transacts in securities only as an agent.
Explanation
Why A — A firm in the business of effecting securities transactions for its own account or the accounts of others.
A broker-dealer is defined by the USA as a person in the business of effecting transactions in securities for the account of others or for its own account (USA Sec. 401(c)). Agents represent broker-dealers, not the other way around. Issuers and banks are specifically excluded from the definition.
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