Editorial Note on Part 240
Editorial Note: Nomenclature changes to part 240 appear at 57 FR 36501, Aug. 13, 1992, and 57 FR 47409, Oct. 16, 1992.

§ 240.3a5-4 Further definition of “as a part of a regular business” in connection with certain liquidity providers. ( 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 ) Engages in a regular pattern of buying and selling securities that has the effect of providing liquidity to other market participants by: ( 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
( 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 ) Is not: ( i ) A person that has or controls total assets of less than $50 million;
( ii ) An investment company registered under the Investment Company Act of 1940; or
( iii ) A central bank, sovereign entity, or international financial institution.
( b ) For purposes of this section: ( 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 ) A person's *own account* means any account: ( i ) Held in the name of that person; or
( ii ) Held for the benefit of that person.
( 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 ) 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 ) The term *sovereign entity* means a central government (including the U.S. Government), or an agency, department, or ministry of a central government.
( c ) No person shall evade the registration requirements of this section by: ( 1 ) Engaging in activities indirectly that would satisfy paragraph (a) of this section; or
( 2 ) Disaggregating accounts.
( 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]