On February 6, 2024, by a vote of 3-2 along party lines, the Securities and Exchange Commission (the SEC or the Commission) adopted Rules 3a5-4 and 3a44-2 under the Securities Exchange Act of 1934 (the Exchange Act), which will significantly expand the definitions of “dealer” and “government securities dealer” to cover additional market participants engaged in liquidity-providing activities, what the staff refers to as “pro forma” market makers. The Exchange Act defines “dealer” as “any person engaged in the business of buying and selling securities … for such person’s own account through a broker or otherwise,” subject to certain exceptions. Under the so-called trader exception, the term “dealer” does not include a person that “buys or sells securities … for such person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business.” The Exchange Act similarly requires a person to register as a government securities dealer only if the person buys and sells government securities for its own account “as a part of a regular business.”