The Broker’s Broker
A broker’s broker is a municipal bond dealer that specializes in brokering transactions for other municipal dealers. It trades only with other dealers or brokers and never with individual or institutional investors.
Currently, about 20 broker’s brokers add liquidity to the market and facilitate the flow of market information by helping broker-dealers find buyers for their securities in specific market segments. Broker’s brokers work for a fee and they do not maintain their own inventories.
One way in which the broker’s broker facilitates trading is by arranging auctions called bid-wanted procedures for brokers or dealers.
In a bid-wanted, a dealer asks a broker’s broker to conduct a blind auction on a security it wishes to sell. The broker advertises the bonds to potential bidders through its extensive distribution network, collects the bids