Two years ago, the SEC proposed a significant expansion of the definition of “dealer” intended to capture certain unregistered firms that provide liquidity to the securities markets and act as de facto market makers (Proposed Rules). On February 6, 2024, the SEC adopted final rules (Rules) updating the definitions of “dealer” and “government securities dealer” under the Securities Exchange Act of 1934. Notwithstanding commenters’ requests, the SEC did not include a blanket exclusion for registered investment advisers or private funds but did make some modifications narrowing the scope of the definition. This article, the first in a two-part series, discusses the Rules, how they differ from the Proposed Rules and the commissioners’ individual views on the rulemaking. The second article will explore what hedge fund managers should do in the wake of the new dealer definition, including which hedge funds may fall under that definition and the options available to the managers of such funds. See “SEC’s Proposed Dealer Rules Would Capture Certain Private Funds” (Jun. 2, 2022).