In which capacity does ABC Brokerage act when purchasing shares from a market maker to fill a customer's buy order?

When ABC Brokerage purchases shares from a market maker to fill a customer's buy order, it acts as an agent. In this capacity, the brokerage facilitates the transaction on behalf of the customer. The brokerage does not take on the risk of ownership of the shares; instead, it simply executes the trade for the client, matching the buy order with the available shares from the market maker.

This agent role is fundamental in the financial markets, as brokerages serve to connect buyers and sellers, ensuring that clients have access to the securities they wish to trade without holding the inventory themselves. By acting as an agent, the brokerage earns commissions or fees for their services while ensuring that the customer’s interests remain the primary focus during the transaction process.