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Information > Financial Terms > This page Street Broker A
broker not belonging to any stock exchange who buys and sells unlisted
securities for his clients. Such
brokers also act as dealers for their own account in buying or selling
unlisted securities. Member
firms also often maintain unlisted trading departments.
Since a market for inactive, unlisted securities is often difficult
to locate, a street broker is useful to banks, investment houses, security
dealers, and other brokers, as well as individual investors and traders.
Street brokers' commissions and markups are self-regulated through
the NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD).
One of the NASD Rules of Fair Practice provides:
"… if a member buys for his own account from his customer, or sells
for his own account to his customer, he shall buy or sell at a price which
is fair, taking into consideration all relevant circumstances, including
market conditions with respect to such security at the time of the transaction,
the expense involved, and the fact that he is entitled to a profit; and
if he acts as agent for his customer … he shall not charge his customer
more than a fair commission or service charge …" |