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ARTICLE · 12 APRIL 2022

SEC Proposes Rules To Clarify Dealer-Trader Distinction

Jones Day
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The Situation: The U.S. Securities and Exchange Commission ("SEC" or "Commission") has proposed new rules that would further define the phrase "part of a regular business"...

United StatesLitigation, Mediation & Arbitration
Michael Butowsky
Michael Butowsky
George Cahill
George Cahill
Thomas M. Devaney
Thomas M. Devaney
Harold Gordon
Harold Gordon
Peter Petraro
Peter Petraro
Laura S. Pruitt
Laura S. Pruitt
Joshua B. Sterling
Joshua B. Sterling
Corey L. Zarse
Corey L. Zarse
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In Short

The Situation: The U.S. Securities and Exchange Commission ("SEC" or "Commission") has proposed new rules that would further define the phrase "part of a regular business" contained in the statutory exclusion from the definitions of "dealer" and "government securities dealer" (the "dealer/trader distinction") to help clarify when a person trading securities for its own account is subject to registration under the Securities Exchange Act.

The Issue: Because the proposed rules would define "part of a regular business" for purposes of determining dealer and government securities dealer status as routinely providing liquidity to other market participants through specified qualitative and quantitative activity, the SEC's proposals seek to greatly expand the number and types of entities that will be subject to agency oversight.

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