Further Definition of “As a Part of a Regular Business” in the Definition of Dealer and Government Securities Dealer
Summary
SIFMA provided comments to the Securities and Exchange Commission (SEC) in regards to proposing new rules to further define the phrase “as a part of a regular business” as used in the statutory definitions of “dealer” and “government securities dealer” under Sections 3(a)(5) and 3(a)(44), respectively, of the Securities Exchange Act of 1934.
Excerpt
May 27, 2022
By Email
Vanessa A. Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 205499–1090
Re: Further Definition of “As a Part of a Regular Business” in the Definition of Dealer and Government Securities Dealer; File No. S7-12-22
Dear Ms. Countryman:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the release by the U.S. Securities and Exchange Commission (the “SEC” or “Commission”) proposing new rules (“Proposing Release”) to further define the phrase “as a part of a regular business” as used in the statutory definitions of “dealer” and “government securities dealer” under Sections 3(a)(5) and 3(a)(44), respectively, of the Securities Exchange Act of 1934 (“Exchange
Act”). 2
This letter supplements our overall comments on the Proposing Release, which we have submitted under separate cover. In this letter, we focus on certain issues of particular relevance to our members that are bank holding companies or foreign banking organizations. Specifically, this letter addresses: (a) significant issues raised by Commission’s proposal to require aggregation of securities trading activity across commonly controlled affiliates for purposes of determining “dealer” and “government securities dealer” status, which the Commission either should replace with a more targeted anti-evasion prohibition or otherwise limit in scope; and (b) necessary clarifications with respect to: (i) asset-liability, liquidity, and collateral management activities; (ii) activities ancillary to exempt dealer activities; and (iii) inter-affiliate transactions.
We do not think that any of the issues identified in this letter are consequences that the Commission intends, especially considering the Proposing Release focuses primarily on certain principal trading firms and other market constituencies other than bank holding companies or their subsidiaries. Accordingly, we hope that the Commission can address these issues before adopting any final rules.
1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on
legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.
2 See Exchange Act Release No. 94524 (March 28, 2022), 87 FR 23054 (April 18, 2022).