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Broker

A person or company involved in the business of buying and selling securities (like stocks and bonds) for others, typically for a commission. Brokers must be registered and follow specific rules.

Registered Representative

A financial professional who works for a brokerage firm and is licensed to buy and sell securities for clients. They are also known as stockbrokers or financial advisors.

Personal Services Entity

A small business or company created by a registered representative primarily to receive their compensation from a brokerage firm and handle administrative tasks, rather than directly conducting securities transactions with clients.

Securities Exchange Act of 1934

A foundational federal law that governs the trading of securities on exchanges and in the over-the-counter markets. It created the Securities and Exchange Commission (SEC) and requires various disclosures to protect investors.

Self-Regulatory Organization (SRO)

An organization, such as FINRA, that sets and enforces rules for its members (like brokerage firms and their employees) to ensure ethical and professional standards in the securities industry. They operate under the oversight of the SEC.

Broker-Dealer Activity

Actions typically undertaken by a registered broker or dealer, such as buying, selling, or underwriting securities, or providing investment advice in connection with these activities.