‘‘(D) had not, during the 10-year period 
preceding that date, been convicted of a felony 
under Federal or State law; and 
‘‘(E) was not barred from registering, or 
had not been expelled from registration, with 
the Commission, the Financial Industry Regu-
latory Authority, the Commodity Futures Trad-
ing Commission, or any State regulatory agen-
cy, without regard to whether the broker or 
dealer had, as of that date, filed an appeal chal-
lenging such a bar or expulsion, as applicable. 
‘‘(6) NON-CUSTODY BROKER OR DEALER.—The 
term ‘non-custody broker or dealer’ means a broker 
or dealer (as those terms are defined in section 3(a) 
of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a))), as applicable, that— 
‘‘(A) as of the last day of the most recently 
completed fiscal year of the broker or dealer— 
‘‘(i) had not less than 1 and not more 
than 150 registered persons holding a se-
curities license registered with the broker 
or dealer; 
‘‘(ii) cleared each eligible transaction 
with and for a consumer on a fully dis-
closed basis with a clearing broker or deal-
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er or a member of a national securities ex-
change that is registered with the Commis-
sion under section 6 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78f); 
‘‘(iii) did not, as a matter of ordinary 
business practice in connection with the ac-
tivities of the broker or dealer, elect to re-
ceive customer checks, drafts, or other evi-
dence of indebtedness made payable to the 
broker or dealer or a person other than the 
requisite registered broker or dealer car-
rying the account of a customer, escrow 
agent, issuer, underwriter, sponsor, or 
other distributor of securities; 
‘‘(iv) did not otherwise hold funds or 
securities for customers; and 
‘‘(v) if required under section 3(a)(2) 
of the Securities Investor Protection Act of 
1970 (15 U.S.C. 78ccc(a)(2)), was a mem-
ber of the Securities Investor Protection 
Corporation; and 
‘‘(B) during the most recently completed 
fiscal year of the broker or dealer, claimed ex-
emption from section 240.15c3–3 of title 17, 
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Code of Federal Regulations, or any successor 
regulation. 
‘‘(7) PRIVATELY
HELD.—The term ‘privately 
held’ means, with respect to a broker or dealer (as 
those terms are defined in section 3(a) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78c(a))), that 
the broker or dealer, as applicable, is not an 
issuer.’’. 
(b) AMENDMENTS
TO
REGULATIONS.—Not later 
than 60 days after the date of enactment of this Act, the 
Securities and Exchange Commission shall make any nec-
essary amendments to regulations of the Commission that 
are in effect as of the date of enactment of this Act in 
order to carry out this Act and the amendments made by 
this Act. 
(c) EFFECTIVE DATE.—This Act, and the amend-
ments made by this Act, shall take effect on the date that 
is 60 days after the date of enactment of this Act. 
Æ 
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