Who Qualifies as an Agent
Overview
- Broker-dealers are financial institutions that help customers buy and sell securities (covered in the previous section).
- Agents are natural persons (human beings) who work for broker-dealers.
- Agents can also work for issuers.
🔑 Definitions
| Term | Definition (statutory, word-for-word) | Example |
|---|---|---|
| Agent | > Any individual who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities | A registered representative you reach when you call a broker-dealer for help placing a stock trade. |
| Issuer | > Any person who issues or proposes to issue any security | McDonald’s is the issuer of McDonald’s common stock (MCD). |
Agent — word-for-word:
Any individual who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities
Issuer — word-for-word:
Any person who issues or proposes to issue any security
The agent definition covers “effecting OR attempting to effect” — the attempt alone is enough; a completed transaction is not required.
An agent must be an individual / natural person (human being). Broker-dealers themselves are firms (entities), not agents. Do not confuse the firm with the human being representing it.
How customers may interact with a broker-dealer
- In many cases, customers can interact with a broker-dealer without ever speaking to an agent — especially with modern digital platforms.
- Example: young investors with Robinhood accounts. Many customers may never have a human-to-human interaction.
- ⚠️ In those situations, the customer is working directly with the broker-dealer, with no agent involved.
- Agents are still an important part of the industry:
- Technology can’t cover every situation.
- Many investors prefer working with a person when placing trades or asking questions.
- If you call a broker-dealer for help with a stock trade, you’ll typically be connected with one of its registered agents.
Common roles and responsibilities of agents
| Role / responsibility | Example given by the text |
|---|---|
| General brokerage customer service | — |
| Transaction support | Explaining what a limit or stop order is |
| Transaction processing | Submitting a stock trade for a customer |
| Relationship management | Point of contact for a broker-dealer’s most profitable clients |
| Back office support | Managing customer files |
| Supervision of other agents | Acting as a manager for a team of agents |
Agents and issuers
- Agents are most commonly associated with broker-dealers, but some issuer employees may also be registered as agents.
What an issuer is
Issuers are organizations that raise capital (money) by selling securities tied to their organizations.
| Issuer | Security issued |
|---|---|
| McDonald’s | McDonald’s common stock (MCD) |
| Fidelity | Fidelity Total Bond Fund (FTBFX) |
| The US Government (technically the US Department of Treasury) | Treasury bonds |
Why issuers usually do NOT use their own agents
- Most of the time, issuers “farm out” the responsibility of selling their securities.
- Example: AirBnB hired Morgan Stanley and Goldman Sachs as co-lead underwriters for their initial public offering (IPO) in December 2020.
- As a hospitality-based business, it wouldn’t make much sense for AirBnB to build an entire finance department solely to sell its securities:
- That would be expensive.
- After the IPO the company might not need that department for a long time.
- If the company didn’t plan to sell another security for some time, the department could be shut down, creating major costs and disruption.
- 📌 That’s why nearly every issuer, sometimes even including financial institutions, hires a third party to sell its securities.
When issuer employees DO become agents
- Some issuers do have their own employees sell their securities.
- 🔑 When those employees represent (work for) the issuer in securities transactions, they must register as agents.
- Example: imagine AirBnB created an internal department responsible for selling its stock to the public. In that case, every employee engaging investors in those sales efforts would be required to register as an agent.
Who IS and who IS NOT an agent (per this chapter)
| Situation | Agent? | Basis in the text |
|---|---|---|
| Natural person representing a broker-dealer in effecting/attempting to effect securities purchases or sales | ✅ IS an agent | Matches the definition directly |
| Natural person representing an issuer in effecting/attempting to effect securities purchases or sales | ✅ IS an agent | “Agents can also work for issuers”; issuer employees engaging investors in sales efforts “would be required to register as an agent” |
| Issuer employee engaging investors in the issuer’s own sales efforts (e.g., hypothetical AirBnB internal sales department) | ✅ IS an agent | Text states registration is required |
| The broker-dealer firm itself | ❌ NOT an agent | Agents are natural persons; the broker-dealer is the financial institution |
| The issuer organization itself | ❌ NOT an agent | The issuer is the entity that “issues or proposes to issue any security” |
| Customer trading directly through a digital platform with no human involved | ❌ No agent involved | “the customer is working directly with the broker-dealer, with no agent involved” |
Note: this chapter defines who is an agent. The related exempt vs. excluded distinction is covered in the separate “Exempt & excluded” section of Definitions — keep the two straight: an exclusion means the person never falls within the definition at all, while an exemption means the person meets the definition but is relieved from registration.
Key points
Agent
- Natural person (human being) representing broker-dealers and issuers
- Effects securities transactions for customers
More from Definitions: Persons · Exempt & excluded · Issuers & securities · Broker-dealers · Investment advisers
Sources
Primary/official references for the material in this chapter. Every link was fetched and returned HTTP 200 on 2026-08-15.
| # | Source | Publisher |
|---|---|---|
| 1 | Uniform Securities Act 1956 with NASAA updates — the tested statute | NASAA |
| 2 | Exchange Act 1934 — broker, dealer, exchange definitions | Cornell LII (15 U.S.C. 78c) |
| 3 | Model rule — dishonest/unethical practices of BDs and agents | NASAA |
| 4 | Achievable Series 65 — chapter 4.2.5 | Achievable (course text) |