What role does a broker-dealer assume when making securities transactions for the accounts of others?

When a broker-dealer makes securities transactions for the accounts of others, it assumes the role of a broker. As a broker, the firm facilitates the buying and selling of securities on behalf of clients, acting as an intermediary between the buyer and the seller. The broker earns a commission for these services, which are compensated based on the volume or value of transactions they facilitate.

This role is characterized by the broker's obligation to act in the best interests of their clients, ensuring that they provide fair and quality service throughout the transaction process. In contrast, when acting as a principal, a broker-dealer buys and sells securities for its own account, taking on the risk associated with those transactions. Understanding the distinction between these roles is crucial in recognizing the responsibilities and duties brokers have towards their clients in the financial markets.