Legal Definitions - dealer

A dealer is generally understood as a person or entity that regularly buys goods, services, or financial instruments with the primary intention of reselling them to others for profit. This role often involves acting as a principal, meaning they take ownership of the items they are selling, or as an intermediary facilitating transactions.

In the specialized context of financial markets, particularly under securities law, a dealer is an individual or firm that engages in the business of buying and selling securities (such as stocks, bonds, or mutual funds) for their own account or on behalf of clients. They may hold an inventory of securities to facilitate trades or act as a market maker.

Here are some examples illustrating the concept of a dealer:

• Automotive Dealer: Imagine "City Motors," a business that purchases new cars directly from various manufacturers. City Motors then sells these cars to individual customers, often offering financing, maintenance packages, and warranties.

  This illustrates a dealer because City Motors buys vehicles (goods) in large quantities from manufacturers and resells them to consumers, acting as a principal in these transactions. Their business model is built on acquiring inventory to sell to an end-user.

• Antiques Dealer: Consider "Timeless Treasures," a shop that acquires antique furniture, vintage jewelry, and historical artifacts from estate sales, auctions, or private sellers. Timeless Treasures then restores or curates these items and sells them to collectors, interior designers, or individuals looking for unique pieces.

  Timeless Treasures functions as a dealer by purchasing unique goods (antiques) and holding them in inventory with the express purpose of reselling them for profit to a different set of buyers who value their historical or aesthetic qualities.

• Securities Dealer: "Global Equities Group" is a financial firm that regularly buys and sells shares of publicly traded companies. They might purchase a large block of shares from one institutional investor and then sell smaller portions to multiple individual investors, or they might buy shares to hold in their own inventory, hoping their value will increase before they resell them to clients or other market participants.

  Global Equities Group is a dealer in the securities context because it is actively involved in the business of buying and selling financial instruments (securities) for its own account or to facilitate transactions for clients, aiming to profit from these activities and provide liquidity to the market.