[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5966 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 5966

 To amend the Commodity Exchange Act with respect to reporting digital 
                        commodity transactions.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 17, 2023

                Mr. Beyer introduced the following bill

                            October 25, 2023

                Referred to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
 To amend the Commodity Exchange Act with respect to reporting digital 
                        commodity transactions.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Off-Chain Digital Commodity 
Transaction Reporting Act of 2023''.

SEC. 2. REPORTING OF SWAPS AND DIGITAL COMMODITY TRANSACTIONS.

    Section 2(a)(13) of the Commodity Exchange Act is amended--
            (1) by amending the paragraph heading to read as follows: 
        ``Reporting and public availability of swap and digital 
        commodity transaction data'';
            (2) in subparagraph (A), by inserting ``or digital 
        commodity'' after ``swap'' both places it appears;
            (3) in subparagraph (B)--
                    (A) by inserting ``or digital commodity'' after 
                ``swap''; and
                    (B) by inserting ``and investor protection'' before 
                the period at the end;
            (4) by amending subparagraph (G) to read as follows:
                    ``(G) Reporting of swaps and digital commodity 
                transactions to registered repositories.--
                            ``(i) Swaps.--Each swap (whether cleared or 
                        uncleared) shall be reported to a registered 
                        swap data repository.
                            ``(ii) Digital commodities.--Each contract 
                        of sale of a digital commodity in interstate 
                        commerce (whether on-chain or off-chain) shall 
                        be reported to a registered digital asset 
                        repository for transactions.'';
            (5) by adding at the end the following:
                    ``(H) Reporting of digital commodity 
                transactions.--
                            ``(i) In general.--With respect to 
                        contracts of sale of digital commodities in 
                        interstate commerce that are not executed on or 
                        through a trading platform, such transactions 
                        shall be reported by the purchaser in real-time 
                        to a registered digital asset repository for 
                        transactions as soon as technologically 
                        practicable after execution of the transaction.
                            ``(ii) Rule for trading platforms.--Trading 
                        platforms which facilitate contracts of sale of 
                        digital commodities in interstate commerce 
                        transactions shall be responsible for reporting 
                        all such transactions to a registered digital 
                        asset repository of transactions as soon as 
                        technically practicable after the execution of 
                        each such transaction.
                    ``(I) Actual delivery of digital commodity 
                transactions.--
                            ``(i) In general.--In the case of a 
                        contract of sale of a digital commodity in 
                        interstate commerce, the seller of such digital 
                        commodity shall actually deliver the digital 
                        commodity into the exclusive control of the 
                        purchaser not less than 24 hours after the 
                        transaction is executed.
                            ``(ii) Actual delivery.--For purposes of 
                        clause (i), actual delivery shall have occurred 
                        only if--
                                    ``(I) the transfer of the digital 
                                commodity from the seller to the 
                                purchaser's address is recorded on the 
                                public distributed ledger for the 
                                digital commodity; or
                                    ``(II) with respect to off-chain 
                                digital commodity transactions on a 
                                trading platform, the trading platform 
                                reports the off-chain digital commodity 
                                transaction, which must be held in a 
                                customer segregated account, to a 
                                registered digital asset repository of 
                                transactions.''.

SEC. 3. SWAP DATA REPOSITORIES AND DIGITAL ASSET REPOSITORIES OF 
              TRANSACTIONS.

    (a) Commodity Exchange Act.--Section 21 of the Commodity Exchange 
Act (7 U.S.C. 24a) is amended to read as follows:

``SEC. 21. SWAP DATA REPOSITORIES AND DIGITAL ASSET REPOSITORIES OF 
              TRANSACTIONS.

    ``(a) Registration Requirement.--
            ``(1) Requirement; authority of derivatives clearing 
        organization.--
                    ``(A) In general.--It shall be unlawful for any 
                person, unless registered with the Commission, directly 
                or indirectly to make use of the mails or any means or 
                instrumentality of interstate commerce to perform the 
                functions of a swap data repository or a digital asset 
                repository of transactions.
                    ``(B) Registration of derivatives clearing 
                organizations.--A derivatives clearing organization may 
                register as a swap data repository.
            ``(2) Inspection and examination.--Each registered swap 
        data repository and digital asset repository of transactions 
        shall be subject to inspection and examination by any 
        representative of the Commission.
            ``(3) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a swap data repository or a digital 
                asset repository of transactions, the swap data 
                repository or digital asset repository of transactions 
                shall comply with--
                            ``(i) the requirements and core principles 
                        described in this section; and
                            ``(ii) any requirement that the Commission 
                        may impose by rule or regulation pursuant to 
                        section 8a(5).
                    ``(B) Reasonable discretion of repository.--Unless 
                otherwise determined by the Commission by rule or 
                regulation, a swap data repository or a digital asset 
                repository of transactions described in subparagraph 
                (A) shall have reasonable discretion in establishing 
                the manner in which the swap data repository or the 
                digital asset repository of transactions complies with 
                the core principles described in this section.
    ``(b) Standard Setting.--
            ``(1) Data identification.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), the Commission shall prescribe standards that 
                specify the data elements for each swap or digital 
                commodity, digital asset, or digital collectible (as 
                determined a collectible under section 408(m) of the 
                Internal Revenue Code) that shall be collected and 
                maintained by each registered swap data repository or 
                digital asset repository of transactions, respectively.
                    ``(B) Requirement.--In carrying out subparagraph 
                (A), the Commission shall prescribe consistent data 
                element standards applicable to registered entities and 
                reporting counterparties.
            ``(2) Data collection and maintenance.--The Commission 
        shall prescribe data collection and data maintenance standards 
        for swap data repositories and digital asset repositories of 
        transactions.
            ``(3) Comparability.--The standards prescribed by the 
        Commission under this subsection shall be comparable to the 
        data standards imposed by the Commission on derivatives 
        clearing organizations in connection with the clearing of swaps 
        or digital commodities, digital assets, or digital 
        collectibles, as appropriate.
            ``(4) Consistent standards.--If a digital asset repository 
        of transactions is jointly registered with the Commission and 
        Securities and Exchange Commission and receives digital 
        commodity, digital asset, and digital collectible transaction 
        data, the Commission shall coordinate with the Securities and 
        Exchange Commission and the Commissioner of the Internal 
        Revenue Service to ensure that the data standards and elements 
        are appropriate and consistent for use by both Commissions and 
        the Internal Revenue Service.
    ``(c) Duties.--A swap data repository or a digital asset repository 
of transactions shall--
            ``(1) accept data prescribed by the Commission for each 
        swap or digital commodity, digital asset, or digital 
        collectible transaction under subsection (b), respectively;
            ``(2) confirm with both counterparties to the swap or 
        digital commodity, digital asset, or digital collectible 
        transaction the accuracy of the data that was submitted;
            ``(3) maintain the data described in paragraph (1) in such 
        form, in such manner, and for such period as may be required by 
        the Commission;
            ``(4)(A) provide direct electronic access to the Commission 
        (or any designee of the Commission, including another 
        registered entity); and
            ``(B) provide the information described in paragraph (1) in 
        such form and at such frequency as the Commission may require 
        to comply with the public reporting requirements contained in 
        section 2(a)(13);
            ``(5) at the direction of the Commission, establish 
        automated systems for monitoring, screening, and analyzing swap 
        or digital commodity, digital asset, or digital collectible 
        data, including compliance and frequency of end user clearing 
        exemption claims by individual and affiliated entities;
            ``(6) maintain the privacy of any and all swap or digital 
        commodity, digital asset, or digital collectible transaction 
        information that the swap data repository or digital asset 
        repository of transactions, respectively, receives from a swap 
        dealer, counterparty, or any other registered entity;
            ``(7) on a confidential basis pursuant to section 8, upon 
        request, and after notifying the Commission of the request, 
        make available each swap or digital commodity, digital asset, 
        or digital collectible data obtained by the swap data 
        repository or digital asset repository of transactions, 
        respectively, including individual counterparty trade and 
        position data, to--
                    ``(A) each appropriate prudential regulator;
                    ``(B) the Financial Stability Oversight Council;
                    ``(C) the Securities and Exchange Commission;
                    ``(D) the Department of Justice; and
                    ``(E) any other person that the Commission 
                determines to be appropriate, including--
                            ``(i) foreign financial supervisors 
                        (including foreign futures authorities);
                            ``(ii) foreign central banks;
                            ``(iii) foreign ministries; and
                            ``(iv) other foreign authorities; and
            ``(8) establish and maintain emergency procedures, backup 
        facilities, and a plan for disaster recovery that allows timely 
        recovery and resumption of operations and the fulfillment of 
        the responsibilities and obligations of the organization.
    ``(d) Confidentiality Agreement.--Before the swap data repository 
or digital asset repository of transactions may share information with 
any entity described in subsection (c)(7), the swap data repository or 
digital asset repository of transactions shall receive a written 
agreement from each entity stating that the entity shall abide by the 
confidentiality requirements described in section 12 of this title 
relating to information on swap or digital commodity, digital asset, or 
digital collectible (as determined a collectible under section 408(m) 
of the Internal Revenue Code), respectively, that is provided.
    ``(e) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap data repository or digital 
        asset repository of transactions shall designate an individual 
        to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the swap data repository or digital asset 
                repository of transactions;
                    ``(B) review the compliance of the swap data 
                repository or digital asset repository of transactions 
                with respect to requirements and core principles 
                described in this section;
                    ``(C) in consultation with the board of the swap 
                data repository or digital asset repository of 
                transactions, a body performing a function similar to 
                the board of the swap data repository or digital asset 
                repository of transactions, or senior officer of the 
                swap data repository or digital asset repository of 
                transactions resolve any conflicts of interest that may 
                arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations) relating to agreements, contracts, or 
                transactions, including each rule prescribed by the 
                Commission under this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                            ``(i) the compliance of the swap data 
                        repository or the digital asset repository of 
                        transactions, as appropriate, of the chief 
                        compliance office with respect to this Act 
                        (including regulations); and
                            ``(ii) each policy and procedure of the 
                        swap data repository or the digital asset 
                        repository of transactions, as appropriate, of 
                        the chief compliance officer (including the 
                        code of ethics and conflict of interest 
                        policies of the swap data repository or the 
                        digital asset repository of transactions, as 
                        appropriate).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                            ``(i) accompany each appropriate financial 
                        report of the swap data repository or digital 
                        asset repository of transactions that is 
                        required to be furnished to the Commission 
                        pursuant to this section; and
                            ``(ii) include a certification that, under 
                        penalty of law, the compliance report is 
                        accurate and complete.
    ``(f) Core Principles Applicable to Swap Data Repositories and 
Digital Asset Repositories of Transactions.--
            ``(1) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, a swap data 
        repository or digital asset repository of transactions shall 
        not--
                    ``(A) adopt any rule or take any actions that 
                result in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                the trading, clearing, or reporting of transactions.
            ``(2) Governance arrangements.--Each swap data repository 
        or digital asset repository of transactions shall establish 
        governance arrangements that are transparent--
                    ``(A) to fulfill public interest requirements; and
                    ``(B) to support the objectives of the Federal 
                Government, owners, and participants.
            ``(3) Conflicts of interest.--Each swap data repository or 
        digital asset repository of transactions shall--
                    ``(A) establish and enforce rules to minimize 
                conflicts of interest in the decision-making process of 
                the swap data repository or the digital asset 
                repository of transactions; and
                    ``(B) establish a process for resolving conflicts 
                of interest described in subparagraph (A).
            ``(4) Additional duties developed by the commission.--
                    ``(A) In general.--The Commission may develop 1 or 
                more additional duties applicable to swap data 
                repositories or digital asset repositories of 
                transactions.
                    ``(B) Consideration of evolving standards.--In 
                developing additional duties under subparagraph (A), 
                the Commission may take into consideration any evolving 
                standard of the United States or the international 
                community.
                    ``(C) Additional duties for commission designees.--
                The Commission shall establish additional duties for 
                any registered swap data repository or digital asset 
                repository of transactions in order to minimize 
                conflicts of interest, protect data, ensure compliance, 
                and guarantee safety and security of the swap data 
                repository or digital asset repository of transactions.
    ``(g) Required Registration of Swap Data Repositories and Digital 
Asset Repositories of Transactions.--Any person that is required to be 
registered as a swap data repository or a digital asset repository of 
transactions under this section shall register with the Commission 
regardless of whether that person is also licensed as a bank, trust 
company, money services business, or registered with the Securities and 
Exchange Commission as a security-based swap data repository, broker-
dealer, qualified custodian, or transfer agent.
    ``(h) Dual SEC and CFTC Registration of Digital Asset Repository of 
Transactions.--Any person that seeks to act as a digital asset 
repository for transactions for digital commodities, digital assets, 
digital collectibles (as determined a collectible under section 408(m) 
of the Internal Revenue Code) shall register with the Commission and 
Securities and Exchange Commission subject to joint regulation by such 
Commissions, but only with respect to the digital commodities and 
digital assets subject to their respective jurisdictions.
    ``(i) Rules.--The Commission shall adopt rules governing persons 
that are registered under this section.''.

SEC. 4. DEFINITIONS.

    (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C 
1a) is amended by adding at the end the following:
            ``(52) Digital asset repository of transactions.--The term 
        `digital asset repository of transactions' or `DART' means any 
        person that collects and maintains information or records with 
        respect to transactions or positions in, or the terms and 
        conditions of digital commodities, digital assets, or digital 
        collectibles (as determined a collectibles under section 408(m) 
        of the Internal Revenue Code) entered into by third parties for 
        the purpose of providing a centralized recordkeeping facility 
        for digital commodities, digital assets, or digital 
        collectibles.
            ``(53) Off-chain digital commodity transaction.--The term 
        `off-chain digital commodity transaction' means any contract of 
        sale of a digital commodity in interstate commerce which is not 
        mined or validated and recorded on the appropriate public 
        distributed ledger for such digital commodity within 24 hours 
        of the transaction being entered into.''.
    (b) Definition of Registered Entity.--Section 1a(40)(E) of the 
Commodity Exchange Act (7 U.S.C. 1a(40)(E)) is amended by inserting 
``or a digital asset repository of transactions'' after ``section 21''.
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