The SEC adopted final rules that expand the definition of a “dealer” and “government securities dealer” under the Securities Exchange Act of 1934 to include market participants that take on significant liquidity-providing roles. The rule is effective April 29, 2024, with a one-year compliance date. However, a legal challenge was promptly filed by various hedge fund industry groups in the U.S. District Court for the Northern District of Texas seeking to vacate the rulemaking, noting that the new rules were vague and overly broad and dramatically expanded to the long-standing definition of a dealer.