What is a dealer under the federal securities laws?
Section 3(a)(5) of the Exchange Act generally defines a “dealer” as “any person engaged in the business of buying and selling securities for his own account, through a broker or otherwise.” All transactions that go through a bank’s own accounting books are potential dealer transactions. The securities laws and rules, however, distinguish “dealers” (which buy and sell securities as part of a regular business) from “traders” (which buy and sell securities for investment and not as part of a regular business). For additional information on distinguishing “dealers” from “traders,” see http://www.sec.gov/rules/proposed/34-46745.htm and http://www.sec.gov/rules/final/34-47364.htm at “Dealer Activities and the Dealer/Trader Distinction.” Typical dealer functions include: • Providing two-sided quotations, or otherwise indicating an ongoing willingness to buy and sell particular securities; or • Issuing or originating securities that the person also buys and sells. If you are trying to determin
