Legal Definitions - responsible broker-dealer

Definition: A broker-dealer who communicates bids or offers on the floor of a stock exchange at the designated location for trading in a reported security or who, in an off-exchange transaction, communicates the bid or offer as either a principal or an agent, for its own or another's account.

Example: A responsible broker-dealer is a brokerage firm that engages in the business of trading securities for its own account before selling them to customers. They are usually registered with the SEC and with the state in which they do business. They are responsible for communicating bids or offers on the floor of a stock exchange or in an off-exchange transaction as either a principal or an agent, for their own or another's account.

Explanation: The example illustrates how a responsible broker-dealer operates in the securities market. They act as intermediaries between buyers and sellers and are responsible for communicating bids or offers on the floor of a stock exchange or in an off-exchange transaction. They are required to be registered with the SEC and with the state in which they do business to ensure that they follow the necessary regulations and safeguards to protect their customers' funds and securities.