Sec. 304. Operation of alternative trading systems
1,135 words·~5 min read·
/bill/119/hr/3633/rh/section-304A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Securities and Exchange Commission shall have jurisdiction over digital commodity activities and transactions engaged in by— a registered broker or registered dealer exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act; and a national securities exchange. The Securities and Exchange Commission shall have authority to issue rules governing any digital commodity activities and transactions engaged in by a broker, dealer, or national securities exchange registered with the Securities and Exchange Commission and exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a national securities exchange or affiliate thereof to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both by registered brokers or registered dealers that are exempt from registration with the Commodity Futures Trading Commission pursuant section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a registered broker or registered dealer that is exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
An alternative trading system operated pursuant to this section and the regulations promulgated hereunder shall be permitted to trade upon notice to the Securities and Exchange Commission in a manner prescribed by the Securities and Exchange Commission any digital commodity that has been listed by a digital commodity exchange in compliance with section 5i(c)(3) of the Commodity Exchange Act. Digital commodity transactions offered on an alternative trading system operating pursuant to this section shall be subject to the jurisdiction of the Securities and Exchange Commission.
The Securities and Exchange Commission shall have authority to promulgate rules governing such digital commodity transactions of alternative trading systems, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors. The Securities and Exchange Commission may suspend the trading of a digital commodity by an alternative trading system operating pursuant to this section as is necessary or appropriate in the public interest and is consistent with the protection of investors.
Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, regarding whether alternative trading systems operating pursuant to subsections
(c)and
(d)have an obligation to provide the prices and sizes of orders displayed to more than one person in such alternative trading system of digital commodities to self-regulatory organizations with members who trade in digital commodities or permitted payment stablecoins. Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, to— apply the rules and standards promulgated pursuant to paragraph
(2)to the appropriate market participants, including— national securities exchanges operating an alternative trading system described in subsection (c); and registered brokers and registered dealers operating or subscribing to an alternative trading system described in subsection (d); and apply, as appropriate to the market participants described in subparagraph
(1)and customers thereof rules and standards to— prevent fraudulent and manipulative acts and practices; foster cooperation and coordination with persons engaged in regulating, settling, processing information with respect to, and facilitating transactions in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection
(c)or (d), or any registered broker or registered dealer; remove impediments to and perfect the mechanism of a free and open market in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection
(c)or (d), or any registered broker or registered dealer; in general, protect investors and the public interest; and prohibit any unfair discrimination between— customers; any market participants described in subparagraphs
(A)and
(B)of paragraph (1); or issuers of digital commodities. The Securities and Exchange Commission shall require any registered national securities association that has as a member a registered broker or registered dealer that operates an alternative trading system pursuant to subsection
(d)or otherwise transacts in digital commodities or permitted payment stablecoins to adopt such rules as may be necessary to further compliance with this section, including subsection (g)(2), protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The enumeration of any category of rules or regulations in this section shall not be construed to limit the authority of the Securities and Exchange Commission to promulgate such rules as may be necessary or appropriate to implement this section and the purposes of this Act, including over— system capacity, integrity, and security; examinations, inspections, and investigations; trade reporting; or written procedures for the confidential treatment of trading information. Consistent with section 5k of the Commodity Exchange Act and to carry out this Act, the Securities and Exchange Commission shall enter into a memorandum of understanding with the Commodity Futures Trading Commission to ensure— requirements imposed on registered brokers or registered dealers operating an alternative trading system pursuant to subsection
(c)or otherwise transacting in digital commodities or permitted payment stablecoins are consistent with the substantive requirements under section 4u of the Commodity Exchange Act; requirements imposed on alternative trading systems operating pursuant to subsection
(c)or
(d)are not inconsistent with core principles of and are consistent with the other substantive requirements under section 5i of the Commodity Exchange Act; and non-duplicative supervision and enforcement with respect to registrants of the Securities and Exchange Commission notice registered with the Commodity Futures Trading Commission. In this section, the term covered regulations means sections 242.300, 242.301, 242.302, 242.303, 242.304, and 242.1000 through 242.1007 of title 17, Code of Federal Regulations. Nothing in this section shall be construed to limit the anti-fraud, anti-manipulation, or false reporting enforcement authorities of the Commodity Futures Trading Commission with respect to a contract of sale of a commodity and persons effecting such contracts.