What is a Broker-Dealer? - Davis Polk & Wardwell

§ 1A:4.4 BROKER-DEALER REGULATION
(iii) any agreement, contract, or transaction providing for the
purchase or sale of one or more securities on a fixed basis;
(iv) any agreement, contract, or transaction providing for the
purchase or sale of one or more securities on a contingent
basis, unless such agreement, contract, or transaction predicates
such purchase or sale on the occurrence of a bona fide
contingency that might reasonably be expected to affect or be
affected by the creditworthiness of a party other than a party to
the agreement, contract, or transaction;
(v) any note, bond, or evidence of indebtedness that is a security
as defined in section 2(a)(1) of the Securities Act of 1933 or
section 3(a)(10) of the Securities Exchange Act of 1934; or
(vi) any agreement, contract, or transaction that is—(A) based on a
security; and (B) entered into directly or through an underwriter
(as defined in section 2(a) of the Securities Act of 1933)
by the issuer of such security for the purposes of raising
capital, unless such agreement, contract, or transaction is
entered into to manage a risk associated with capital raising.
The CFMA also amended section 15(i) of the Exchange Act, limiting
the SEC’s rulemaking and enforcement authority regarding new
hybrid products 293 offered by banks.
[C] The Dodd-Frank Wall Street Reform and
Consumer Protection Act
In the wake of the recent financial crisis, 2010 saw the enactment
on July 21, 2010 of the Dodd-Frank Act, which adopted sweeping
revisions to the securities and banking laws. One significant emphasis
of Dodd-Frank is on the regulation of swaps and other over-thecounter
derivatives. Among many other changes, the derivatives title
(Title VII) of Dodd-Frank effects the following:
(i) creates new definitions of (and new regulatory requirements
for) “swaps,” “security-based swaps” (SBS), “swap dealers,”
“security-based swap dealers” (“SBS dealers”), “major swap
participants” (MSPs), “major security-based swap participants”
(SBS MSPs), swap execution facilities (SEFs), and
security-based swap execution facilities (SBS SEFs);
(ii) generally allocates jurisdiction over swaps, swap dealers, SEFs,
and MSPs to the CFTC and over SBS, SBS dealers, SBS SEFs,
and SBS MSPs to the SEC;
293. “New hybrid product” is defined in Exchange Act § 15(i)(6)(A).
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