Broker Dealer for Sale

2007-10-15 12:53:47

( Financial )



What is a Broker Dealer?

This is a collective term which means an individual or company engaged in the sale or trading of securities. As broker dealer, you can either act as the broker or middle party in the sale of securities, or you can also act as principal and trade your own accounts. You have the right to buy mortgages and other financial investments from individuals and then resell them.

The Need to Register as Broker Dealer

As a broker dealer, you are a business entity and therefore you must register with the Securities and Exchange Commission. Depending on the type of securities you are going to trade, you also need to register your company accordingly. You may register as a general purpose broker dealer which sells different types of securities, or you may register as specialized dealer broker if you limit yourself to selling only certain types of securities.

There are some exceptions to the registration requirement. You can get exempted if you are doing this business only within your state's boundaries. Certain commercial papers and bills may also qualify for exemption. You may also be exempted if you are based in a foreign country.

Starting out on your own broker dealer business is a long and tedious process, unless you have the time and money. There are many documents and requirements to comply with, which includes undergoing a review process that takes several months.

Buying an Existing Broker Dealer

Rather than wait for the long process of setting up and subjecting your firm to a review process, you might consider looking into an existing broker dealer for sale and buying it.

Your biggest advantage in buying an existing broker dealer is time. If you were to start your own broker dealer company from ground zero, you would have spent a few months just awaiting SEC approval. On the other hand, buying an existing broker dealer company will allow you to start operations in as little as two weeks.

The only catch is that you must look for a reputable broker dealer for sale, so that there will be no existing liabilities or other issues that you might inherit with the acquisition.

How to Look for Broker Dealer for Sale

There are several online business consultancy firms that can assist you in finding the right broker dealer for sale. The consultant will discuss your needs and preferences, and will conduct an analysis to determine which broker dealer for sale can be referred to you. Once you find one that matches your needs, you pay a refundable deposit for it.

Before looking up a broker dealer for sale, you may want to consult your own legal counsel about documentation and other requirements to effect the purchase and transfer of ownership.


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