The U.S. Securities and Exchange Commission (SEC) proposed new rules that would require certain entities – including market trading firms and liquidity providers — to register with the SEC as “dealers.”
The proposed rules, the Exchange Act Rules 3a5-4 and 3a44-2, would further define the phrase “as a part of a regular business” to identify certain activities that would cause persons engaging in such activities to be “dealers” or “government securities dealers” and subject to registration requirements.
Specifically, any market participant who engages in activities described in the rules would be a “dealer” or “government securities dealer.” Absent an exception or exemption, they would be required to: register with the SEC, become a member of a self-regulatory organization (SRO), and comply with federal securities laws and regulatory obligations.
“I was pleased to support this proposal because I believe it reflects Congress’s statutory intent that firms engaging in important liquidity-providing roles in the securities markets, including in the U.S. Treasury market, be registered with the Commission,” SEC Chair Gary Gensler said. “Further, requiring all firms that regularly make markets, or otherwise perform important liquidity-providing roles, to register as dealers or government securities dealers also could help level the playing field among firms and enhance the resiliency of our markets.”
The proposal will be published on SEC.gov and in the Federal Register. The public comment period will remain open for 60 days following publication of the proposing release on the SEC’s website or 30 days following publication of the proposing release in the Federal Register, whichever period is longer.