Sponsor
Byron Donalds
Representative · R-FL
Representative · R-FL
The bill reduces regulatory scope and compliance burdens for many firms by narrowing the dealer definition and excluding most security-based swaps, at the cost of weakening investor protections and potentially increasing market risk and complications for enforcement and restitution.
Financial institutions and derivatives traders that both buy for their own account and sell to customers will see a narrower, clearer legal definition of “dealer,” and most security-based swaps excluded from that definition, reducing regulatory uncertainty and compliance burdens for those firms.
Financial firms that previously faced dealer obligations may no longer be treated as dealers, lowering ongoing regulatory costs and oversight obligations for those firms.
Affected firms may be able to have prior orders or judgments vacated under the new definition, potentially reducing past enforcement liabilities and legal exposure for those firms.
Investors and counterparties may lose protections because firms that would previously qualify as dealers (and be subject to dealer-specific obligations) could instead fall outside the dealer definition.
Market participants and counterparties may face increased risk as exempting most security-based swaps from the dealer definition could shift trading into less-regulated activity, raising the chance of greater market risk or instability.
Vacating past SEC or court orders under the revised definition could reduce enforcement finality and complicate restitution or recovery for harmed investors, potentially increasing costs for taxpayers and reducing deterrence.
Based on analysis of 2 sections of legislative text.
Redefines the statutory term “dealer” for securities law, excludes most security‑based swaps, and requires vacatur of certain orders; effective 30 days after enactment.
Official title: To amend the Securities Exchange Act of 1934 to provide a definition for dealer.
Introduced April 16, 2026 by Byron Donalds · Last progress April 16, 2026
Redefines who counts as a securities “dealer” by specifying that a dealer is any person who both (1) buys securities from customers into their own account with the intent to sell them elsewhere and (2) sells to customers securities that the person previously bought for its own account. The new definition excludes security‑based swaps except when those swaps involve counterparties who are not eligible contract participants. The change becomes effective 30 days after enactment and directs courts and the SEC to vacate certain prior or interim orders or judgments that would not have been entered under the new dealer definition — some “as soon as practicable” and others no later than five years after enactment.