17 CFR § 240.3a44-2 - Further definition of “as a part of a regular business” in connection with certain liquidity providers.
---
identifier: "/us/cfr/t17/s240.3a44-2"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "17 CFR § 240.3a44-2 - Further definition of “as a part of a regular business” in connection with certain liquidity providers."
title_number: 17
title_name: "Commodity and Securities Exchanges"
section_number: "240.3a44-2"
section_name: "Further definition of “as a part of a regular business” in connection with certain liquidity providers."
chapter_name: "SECURITIES AND EXCHANGE COMMISSION"
part_number: "240"
part_name: "GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78j-4, 78k, 78k-1, 78 78m, 78n, 78n-1, 78 78-4, 78-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 78 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 1681w(a)(1), 6801-6809, 6825, 7201 and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; Pub. L. 111-203, 939A, 124 Stat. 1376 (2010); and Pub. L. 112-106, sec. 503 and 602, 126 Stat. 326 (2012), unless otherwise noted."
cfr_part: "240"
---
# 240.3a44-2 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 government 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)(44)(A) of the Act (15 U.S.C. 78c(a)(44)(A)) if that person:
(1) Engages in a regular pattern of buying and selling government 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; or
(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 government securities dealer within the meaning of section 3(a)(44) of the Act (15 U.S.C. 78c(a)(44)) solely because that person does not satisfy paragraph (a) of this section.
[89 FR 15009, Feb. 29, 2024]