The US Securities and Exchange Commission (SEC) announced new rules on February 6 that would increase registration requirements, and entice more market participants to join a self-regulatory organization. It also said it guarantees adherence to federal securities laws and regulations. The new laws may lead to additional regulation of cryptocurrencies and decentralized finance (DeFi).
The proposed new regulations were presented in 2022 in a 247-page document. The definitions of “dealer” and “government securities dealer” in the Securities Act Rules deviate from those found in the 1934 Securities Exchange Act, as does the definition of “as a part of a regular business.”
Market participants who bear significant responsibility for supplying liquidity will be bound by the regulations. The new rules allow a dealer to profit from buying at the bid and selling at the offer, as well as from any incentives that trading venues provide to traders who supply liquidity.
Additionally, they can display trading interest in the same security at or close to the best prices that are offered on both ends of the market.
They have to meet a minimum threshold as per the new guidelines. Dealers must possess or have control over $50 million to be subject to it. In the end, the guidelines passed on a party-line vote, with only two Republicans on the SEC voting against them.