The term “ bank” means (A) a banking institution organized under the laws of the United States or a Federal savings association, as defined in section 1462(5) 1 of title 12, (B) a member bank of the Federal Reserve System, (C) any other banking institution or savings association, as defined in section 1462(4) 1 of title 12, whether incorporated or not, doing business under the laws of any State or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency pursuant to section 92a of title 12, and which is supervised and examined by State or Federal authority having supervision over banks or savings associations, and which is not operated for the purpose of evading the provisions of this chapter, and (D) a receiver, conservator, or other liquidating agent of any institution or firm included in clauses (A), (B), or (C) of this paragraph. For purposes of sections 78f(b)(1), 78f(b)(4), 78f(b)(6), 78f(b)(7), 78f(d), 78q(d), 78s(d), 78s(e), 78s(g), 78s(h), and 78u of this title, the term “member” when used with respect to a national securities exchange also means, to the extent of the rules of the exchange specified by the Commission, any person required by the Commission to comply with such rules pursuant to section 78f(f) of this title. The term “ member” when used with respect to a national securities exchange means (i) any natural person permitted to effect transactions on the floor of the exchange without the services of another person acting as broker, (ii) any registered broker or dealer with which such a natural person is associated, (iii) any registered broker or dealer permitted to designate as a representative such a natural person, and (iv) any other registered broker or dealer which agrees to be regulated by such exchange and with respect to which the exchange undertakes to enforce compliance with the provisions of this chapter, the rules and regulations thereunder, and its own rules. If you aren't certain, you may want to review SEC interpretations, consult with your attorney, or ask for our advice.įor more information, read our Guide to Broker-Dealer Registration. If you are doing, or may do, any of the activities of a broker or dealer, you should find out if you need to register. For more information, please see guidance for Banks and Other Depository Institutions. Please note that special provisions apply to broker and dealer activity by banks.
And a firm that advertises publicly it makes a market in securities is obviously a dealer. For example, a person who executes transactions for others on a securities exchange clearly is a broker. Sometimes you can easily tell if someone is a broker or dealer. Individuals who buy and sell securities for themselves generally are considered traders and not dealers. A trader is someone who buys and sells securities, either individually or in a trustee capacity, but not as part of a regular business. Traders are excluded from the definition of dealer.
Section 3(a)(5) of the Act generally defines a "dealer" as:Īny person engaged in the business of buying and selling securities for his own account, through a broker or otherwise. Unlike a broker who acts as agent, a dealer acts as principal. The term "person" includes entities as well as individuals. Section 3(4) of the Act defines "broker" broadly as:Īny person engaged in the business of effecting transactions in securities for the account of others. Under Section 15 of the Securities Exchange Act of 1934, most "brokers" and "dealers" must register with the SEC and join a "self-regulatory organization," or SRO. Five Questions to Ask Before You Invest.
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