Summary
The Securities and Exchange Commission (SEC) has voted to expand the definition of ‘dealer’ to include companies that regularly trade US Treasurys and other securities. The new regulations will require hedge funds, proprietary trading firms, and others acting as liquidity providers for US Treasurys and securities through trades exceeding $50 million to register with the SEC, become members of a self-regulatory organization, and comply with federal securities laws. This expansion also includes cryptocurrency firms that trade government securities or digital assets classified as securities. The SEC’s move has faced criticism from industry participants who argue that the agency is overstepping its power and creating unattainable policies.
Key Points
1. The Securities and Exchange Commission (SEC) has voted to expand the definition of ‘dealer’ to include companies that routinely trade US Treasurys and other securities. This expansion will impact both cryptocurrency firms and traditional finance operations.
2. Hedge funds, proprietary trading firms, and other liquidity providers for US Treasurys and securities through trades exceeding $50 million will now fall under the SEC’s definition of dealer. These companies will be required to register with the agency, become members of a self-regulatory organization (SRO), and comply with federal securities laws.
3. Crypto companies that trade more than government securities or digital assets classified as securities by the government will also be considered dealers. This move comes as SEC Chair Gary Gensler argues that these companies should be regulated to ensure investor protection and market integrity.