1. (a) A person that is engaged in buying and selling securities for its own account is engaged in such activity “as a part of a regular business” as the phrase is used in section 3(a)(5)(B) of the Act (15 U.S.C. 78c(a)(5)(B)) if that person:

   1. (1) Engages in a regular pattern of buying and selling securities that has the effect of providing liquidity to other market participants by:

      1. (i) Regularly expressing trading interest that is at or near the best available prices on both sides of the market for the same security and that is communicated and represented in a way that makes it accessible to other market participants; or
      2. (ii) Earning revenue primarily from capturing bid-ask spreads, by buying at the bid and selling at the offer, or from capturing any incentives offered by trading venues to liquidity-supplying trading interest; and

   2. (2) Is not:

      1. (i) A person that has or controls total assets of less than $50 million;
      2. (ii) An investment company registered under the Investment Company Act of 1940; or
      3. (iii) A central bank, sovereign entity, or international financial institution.

2. (b) For purposes of this section:

   1. (1) The term person has the same meaning as prescribed in section 3(a)(9) of the Act (15 U.S.C. 78c(a)(9)).

   2. (2) A person's own account means any account:

      1. (i) Held in the name of that person; or
      2. (ii) Held for the benefit of that person.
   3. (3) The term central bank means a reserve bank or monetary authority of a central government (including the Board of Governors of the Federal Reserve System or any of the Federal Reserve Banks) and the Bank for International Settlements.
   4. (4) The term international financial institution means the African Development Bank; African Development Fund; Asian Development Bank; Banco Centroamericano de Integración Económica; Bank for Economic Cooperation and Development in the Middle East and North Africa; Caribbean Development Bank; Corporación Andina de Fomento; Council of Europe Development Bank; European Bank for Reconstruction and Development; European Investment Bank; European Investment Fund; European Stability Mechanism; Inter-American Development Bank; Inter-American Investment Corporation; International Bank for Reconstruction and Development; International Development Association; International Finance Corporation; International Monetary Fund; Islamic Development Bank; Multilateral Investment Guarantee Agency; Nordic Investment Bank; North American Development Bank; and any other entity that provides financing for national or regional development in which the U.S. Government is a shareholder or contributing member.
   5. (5) The term sovereign entity means a central government (including the U.S. Government), or an agency, department, or ministry of a central government.

3. (c) No person shall evade the registration requirements of this section by:

   1. (1) Engaging in activities indirectly that would satisfy paragraph (a) of this section; or
   2. (2) Disaggregating accounts.
4. (d) No presumption shall arise that a person is not a dealer within the meaning of section 3(a)(5) of the Act solely because that person does not satisfy paragraph (a) of this section.

[89 FR 15009, Feb. 29, 2024]