8.2.1. Market Participants
Brokers, Dealers, and Broker-Dealers. A broker is any person engaged in the business of buying and selling securities for the accounts of others. A dealer is any person engaged in the business of buying and selling securities for its own account, as part of a regular business.
Generally, broker-dealers are firms that perform the functions of both brokers and dealers—broker-dealers can be individuals, but they are usually companies. Under most circumstances, commercial banks are not included in the definition of broker or dealer. Banks are generally regulated under separate banking laws.
Bank Dealers. The MSRB refers to bank dealers as those separate divisions or departments of a bank engaged in municipal securities dealer activities for their own accounts. Activities of a bank that constitute municipal securities dealer activities include:
• Underwriting, trading, or sales of municipal securities
• Financial advisory or consultant services for issuers in connection with the issuance of municipal securities
• Processing or clearance activities with respect to municipal securities
• Research or investment advice with respect to municipal securities
• Any other activities that involve communication, directly or indirectly, with public investors in municipal securities
• Maintenance of records with respect to municipal securities activities
Municipal Securities Dealers. Collectively, all dealers, broker-dealers, and bank dealers that underwrite, trade, and sell municipal securities are known as municipal securities dealers.
The 1934 Act defines a municipal securities dealer as any person or entity, including a separately identifiable department or division of a bank, engaged in the business of buying and selling municipal securities for its own account. However, municipal securities dealers do not include:
• Those who buy or sell municipal securities for their own accounts, but n