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ABC hedge fund is a major market maker in certain securities and is also a proprietary trader in its distressed debt business. What is the

ABC hedge fund is a major market maker in certain securities and is also a proprietary trader in its distressed debt business. What is the difference between the two roles? Why can ABC hedge fund operate in both roles but N Bank, which accepts Federal Deposit Insurance Corporation (FDIC) insured deposits and is regulated by the Federal Reserve, cannot? What federal regulation governs this?

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