What is the role of a broker-dealer in the trading of securities?

A broker-dealer is an individual or firm that facilitates the trading of securities. They act as intermediaries between buyers and sellers in the stock market. Broker-dealers play an important role in facilitating and regulating the purchase and sale of stocks, bonds, mutual funds, and other financial instruments. When a customer wants to purchase a security, the broker-dealer first determines the customer’s risk tolerance and financial goals. Then, they will research potential investments and make recommendations to the customer. After the customer selects a security, the broker-dealer will execute the purchase of the security and deliver the shares to the customer’s brokerage account. When a customer wants to sell a security, the broker-dealer will research the stock and its current market price, then help find a buyer for the security. Once a buyer is found, the broker-dealer will facilitate the transaction and deliver the proceeds to the customer’s account. In addition to buying and selling securities, broker-dealers are also responsible for providing investment advice and guidance to customers. They must comply with the laws and regulations outlined in California’s Investment Law. This includes registration with the state’s securities regulator and providing clients with accurate and up-to-date information regarding the securities they are trading.

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What is the role of a broker-dealer in the trading of securities?

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