May 27, 2022

Vanessa A. Countryman,
Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549-1090

Re: Notice of Proposed Rulemaking: Further Definition of “As a Part of a Regular Business” in the Definition of Dealer and Government Securities Dealer 1 (File No. S7-12-22)

Dear Ms. Countryman:

The Asset Management Group of the Securities Industry and Financial Markets Association (“SIFMA AMG”)2 appreciates the opportunity to provide comments to the Securities and Exchange Commission (the “Commission” or “SEC”) on the Proposed Rules that would further define the phrase “as a part of a regular business” as used in the statutory definitions of “dealer” and “government securities dealer” under Sections 3(a)(5) and 3(a)(44), respectively, of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

If adopted, the Proposed Rules would result in several money managers having to register as “dealers” and “government securities dealers.” While SIFMA AMG can appreciate the Commission’s efforts to protect investors and further the public interest, we do not believe that the Proposal will achieve those goals with respect to money managers. Rather, we believe that many of the policy goals articulated in the Proposal can be achieved through other means that are already in place and less burdensome to amend. As a result, we believe that the Proposal places an unfair burden on market participants, such as money managers, who do not engage in dealing activities nor raise the investor protection and public interest concerns that form the historical basis of the dealer registration requirement. As the Commission is aware, money managers are already subject to a comprehensive regulatory framework that offers significant investor protections and Commission oversight of trading activities.

We also believe that the Proposal suffers from other significant deficiencies, including the potential for an arbitrary application of the rules at the discretion of regulators to a questionable statutory basis for proposing and adopting the rules. For instance, the Proposal’s broad reach and ambiguous standards will greatly increase regulatory uncertainty for buy-side market participants. In addition, we note that the Commission appears to have disregarded Congressional intent regarding the oversight of the securities markets and has not articulated a clear investor protection and public interest rationale for the Proposal. Further, the wording of the Proposal—in particular, the aggregation provisions and qualitative standards—

1 Further Definition of “As a Part of a Regular Business” in the Definition of Dealer and Government Securities Dealer, Securities Exchange Act Release No. 94,524 (Mar. 28, 2022), 87 Fed. Reg. 23,054 (Apr. 18, 2022) (“Proposal” or “Proposed Rules”).

2 SIFMA AMG brings the asset management community together to provide views on U.S. and global policy and to create industry best practices. SIFMA AMG’s members represent U.S. and global asset management firms whose combined assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds.