Trading certification and approval for digital commodities

Section 5c of the Commodity Exchange Act (7 U.S.C. 7a–2) is amended— (1) in subsection (a), by striking 5(d) and 5b(c)(2) and inserting 5(d), 5b(c)(2), and 5i(c); (2) in subsection (b)— (A) in each of paragraphs (1) and (2), by inserting digital commodity exchange, before derivatives; and (B) in paragraph (3), by inserting digital commodity exchange, before derivatives each place it appears; (3) in subsection (c)— (A) in paragraph (2), by inserting or participants before (in; (in a; (B) in paragraph (4)(B), by striking 1a(10) and inserting 1a(9); and (C) in paragraph (5), by adding at the end the following: (D) Special rules for digital commodity contracts In certifying any new rule or rule amendment, or listing any new contract or instrument, in connection with a contract of sale of a commodity for future delivery, option, swap, or other agreement, contract, or transaction, that is based on or references a digital commodity, a registered entity shall make or rely on a certification under subsection (d) for the digital commodity.; and (4) by inserting after subsection (c) the following: (d) Certifications for digital commodity trading (1) In general Notwithstanding subsection (c), for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market, an eligible entity shall submit a written certification to the Commission that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act). (2) Contents of the certification (A) In general In making a written certification under this paragraph, the eligible entity shall furnish to the Commission an analysis of how the digital commodity meets the requirements of section 5i(c)(3). (B) Reliance on prior disclosures In making a certification under this subsection, an eligible entity may rely on the records and disclosures of any relevant person registered with the Securities and Exchange Commission or other State or Federal agency. (3) Modifications (A) In general An eligible entity shall modify a certification made under paragraph (1) to— (i) account for significant changes in any information provided to the Commission under paragraph (2)(A)(ii); or (ii) permit or restrict trading in units of a digital commodity held by a digital commodity related person or a digital commodity affiliated person. (B) Recertification Modifications required by this subsection shall be subject to the same disapproval and review process as a new certification under paragraphs (4) and (5). (4) Disapproval (A) In general The written certification described in paragraph (1) shall become effective unless the Commission finds that the listing of the digital commodity is inconsistent with the requirements of this Act or the rules and regulations prescribed under this Act. (B) Analysis required The Commission shall include, with any findings referred to in subparagraph (A), a detailed analysis of the factors on which the decision was based. (C) Public findings The Commission shall make public any disapproval decision, and any related findings and analysis, made under this paragraph. (5) Review (A) In general Unless the Commission makes a disapproval decision under paragraph (4), the written certification described in paragraph (1) shall become effective, pursuant to the certification by the eligible entity and notice of the certification to the public (in a manner determined by the Commission) on the date that is— (i) 20 business days after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation), in the case of a digital commodity that has not been certified under this section or for which a certification is being modified under paragraph (3); or (ii) 1 business day after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation) for any digital commodity that has been certified under this section. (B) Extensions The time for consideration under subparagraph (A) may be extended through notice to the eligible entity that there are novel or complex issues that require additional time to analyze, that the explanation by the submitting eligible entity is inadequate, or of a potential inconsistency with this Act— (i) once, for 30 business days, through written notice to the eligible entity by the Commission; and (ii) once, for an additional 30 business days, through written notice to the eligible entity from the Commission that includes a description of any deficiencies with the certification, including any— (I) novel or complex issues which require additional time to analyze; (II) missing information or inadequate explanations; or (III) potential inconsistencies with this Act. (6) Prior approval before registration (A) In general A person applying for registration with the Commission for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market may request that the Commission grant prior approval for the person to list or offer the digital commodity on being registered with the Commission. (B) Request for prior approval A person seeking prior approval under subparagraph (A) shall furnish the Commission with a written certification that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act) and the information described in paragraph (2). (C) Deadline The Commission shall take final action on a request for prior approval not later than 90 business days after submission of the request, unless the person submitting the request agrees to an extension of the time limitation established under this subparagraph. (D) Disapproval (i) In general The Commission shall approve the listing of the digital commodity unless the Commission finds that the listing is inconsistent with this Act (including any regulation prescribed under this Act). (ii) Analysis required The Commission shall include, with any findings made under clause (i), a detailed analysis of the factors on which the decision is based. (iii) Public findings The Commission shall make public any disapproval decision, and any related findings and analysis, made under this paragraph. (7) Eligible entity defined In this subsection, the term eligible entity means a registered entity or group of registered entities acting jointly..