Findings

Congress finds the following: (1) Precious metals exchanges currently require physically traded metals to be stored within close proximity to New York City. (2) Geographic concentration creates systemic risk vulnerabilities, reduces available liquidity, and increases the cost to market participants. (3) Recent liquidity events in global metals markets underscore the need to minimize regulatory barriers that reduce the available supply of metals to the publicly traded marketplace. (4) Notwithstanding the current limited supply, the security standards of existing vaults supporting publicly traded exchanges are outstanding and have enhanced the confidence of market participants. (5) Market liquidity and participant confidence will be enhanced by the addition of storage vaults of relative scale and commercial importance in the marketplace. (6) Additional supply in lower-cost markets, especially markets that are near hubs of precious metals activity and interstate transportation networks, would also reduce storage costs, enhance competition in the storage marketplace, and promote greater market access to investors. (7) It is in the public interest for systemically important financial market utilities to provide a clear and transparent selection process for precious metals storage facilities within their network.