Final answer:
A broker-dealer can act as both a broker and a principal in the same transaction, subject to regulatory oversight to ensure transparency and fairness in securities transactions.
Step-by-step explanation:
In the financial industry, a broker-dealer may act in a dual capacity by being both a broker and a principal in the same transaction, but this role carries specific disclosures and consent requirements. When acting as a broker, the broker-dealer executes orders on behalf of its clients, whereas when acting as a principal, it trades for its account, potentially with its client. Regulation by institutions such as the Securities and Exchange Commission (SEC) regulates and supervises these actions to protect investor interests, ensuring transparency and fairness in the sale of securities.