Brokered

Brokered is an adjective used to describe a transaction or arrangement that is mediated by a broker, an intermediary who facilitates deals between two or more parties. The broker earns a fee or commission for connecting buyers and sellers or lenders and borrowers, and for providing access to markets or terms that would be difficult to obtain directly.

In finance, brokered markets exist to bring together counterparties for assets that do not trade on centralized exchanges, or to navigate complex financings. Brokers may locate inventory, negotiate terms, and handle documentation. Examples include brokered certificates of deposit, municipal and corporate bonds sold through broker channels, and certain private placements. Brokered CDs, issued by banks and sold through brokerage firms, can offer broader choice of maturities and potentially higher yields, but may involve liquidity risk and different pricing dynamics compared with standard bank-issued CDs.

In lending, a mortgage broker connects borrowers with lenders, helping borrowers compare loan terms and processing applications. Mortgage brokers are typically compensated by lenders, borrowers, or both, depending on regulation and practice, and they do not fund loans themselves.

In politics, a brokered convention describes a situation in which no candidate wins a decisive majority of delegates going into a party convention, leading party insiders to broker a nomination behind closed doors. Such conventions are rare but have occurred in history as a mechanism to resolve deadlock.