HR 8328
Defining Dealer Act
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- Passed Senate
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Bill overview
This bill clarifies the definition of ‘dealer’ under the Securities Exchange Act of 1934. Specifically, it expands the definition to include individuals who buy securities for their own account and then sell them to customers, and vice versa. The bill also establishes a process for courts and the Securities and Exchange Commission to potentially overturn existing orders or judgments related to dealer activities that were issued before the change in definition.
Key provisions
- Expands the definition of ‘dealer’ to include individuals buying and selling securities for customers.
- Specifically excludes security-based swaps with non-eligible contract participants from the definition.
- Establishes a 5-year period for courts and the SEC to vacate covered actions entered after the bill’s enactment.
- Provides a mechanism for courts and the SEC to vacate prior judgments related to dealer activities.
Who is affected
- Securities dealers
- Investors
- Courts
- The Securities and Exchange Commission
- Broker-dealers
Notable changes
- Creates a new definition of ‘dealer’ with specific buying and selling requirements.
- Introduces a process for challenging existing legal actions related to dealer activities.
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Primary sponsor
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119th CONGRESS — 2d Session
H. R. 8328
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Securities Exchange Act of 1934 to provide a definition for dealer.
This Act may be cited as the Defining Dealer Act
.
Subparagraph (A) of section 3(a)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78C(a)(5)) is amended to read as follows:
by buying from their customers securities (not including security-based swaps, other than security-based swaps with or for persons that are not eligible contract participants) for such person’s own account through a broker or otherwise with a view of disposing of them elsewhere; and
by selling to their customers securities (not including security-based swaps, other than security-based swaps with or for persons that are not eligible contract participants) which they have purchased for their own account elsewhere.
The amendment made by this subsection shall take effect on the date that is 30 days after the date of the enactment of this Act.