HR 8007
SILVER Act
Take action
Record your position on this measure.
Sign in to record your position, submit testimony, or contact your legislator.
Sign in to take action- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Bill overview
The System Integrity through Licensed Vault Expansion and Resilience Act (SILVER Act) amends the Commodity Exchange Act to reduce systemic risk in the precious metals market by encouraging geographic diversity in storage facilities. Specifically, it requires derivatives clearing organizations to establish transparent criteria for selecting precious metals depositories, prioritizing factors like geographic diversity, competition, and risk management. The bill also mandates that these organizations approve new depositories in multiple time zones and periodically assess the ease of physical settlement for commodities across the United States.
Key provisions
- Requires derivatives clearing organizations to develop objective criteria for selecting precious metals depositories.
- Mandates geographic diversity in depository locations, with a requirement for at least two depositories per time zone (Eastern, Central, Mountain, Pacific).
- Establishes a formal process for precious metals depositories to apply for selection by derivatives clearing organizations.
- Requires derivatives clearing organizations to consider factors like competition, risk management, and storage costs when selecting depositories.
- Directs derivatives clearing organizations to periodically assess physical settlement accessibility for commodities.
- Updates regulations to include risks associated with the geographic concentration of precious metals storage.
- Adds a requirement for derivatives clearing organizations to evaluate metal service providers, including depositories, with respect to trade.
Who is affected
Sponsors
Official sponsors from legislative records.
Primary sponsor
Cosponsors
Arguments in favor
Reasons to support this legislation.
No arguments in favor have been submitted.
Submit yoursArguments opposed
Reasons to oppose this legislation.
No arguments opposed have been submitted.
Submit yoursRead the latest version inline or switch to a previous version.
119th CONGRESS — 2d Session
H. R. 8007
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Commodity Exchange Act to reduce systemic risk while increasing geographical diversity and competition with respect to depositories for the storage of precious metals, and for other purposes.
This Act may be cited as the System Integrity through Licensed Vault Expansion and Resilience Act SILVER Act
or the
.
Congress finds the following:
Precious metals exchanges currently require physically traded metals to be stored within close proximity to New York City.
Geographic concentration creates systemic risk vulnerabilities, reduces available liquidity, and increases the cost to market participants.
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.
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.
Market liquidity and participant confidence will be enhanced by the addition of storage vaults of relative scale and commercial importance in the marketplace.
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.
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.
Section 5b(c)(2) of the Commodity Exchange Act (7 U.S.C. 7a–1(c)(2)) is amended—
in subparagraph (E)(vii), by inserting , including risks related to the geographic concentration of depositories for the storage of gold, silver, platinum, and palladium (referred to in this paragraph as
after precious metals
),clause (vi)
;
in subparagraph (F)—
by redesignating clause (iii) as clause (iv); and
by inserting after clause (ii) the following:
A derivatives clearing organization shall—
develop, publish, and employ objective and transparent criteria in evaluating and selecting depositories for the storage of precious metals used in connection with a contract of sale of a commodity for future delivery; and
provide a formal process for those depositories to apply for that selection.
In selecting depositories under subclause (I), a derivatives clearing organization shall—
assess and account for, among other factors, geographic diversity, competition, risk management, storage costs to members and participants, and systemic risk implications; and
approve new depositories in the context of a public interest in increased geographic diversity, increased liquidity, market resiliency, market access, competition, and cost efficiency, consistent with appropriate security and quality standards.
A derivatives clearing organization shall select at least 2 depositories described in subclause (I) in each time zone described in item (bb).
A time zone referred to in item (aa) is each of the following:
Eastern time.
Central time.
Mountain time.
Pacific time.
in subparagraph (I)—
in clause (ii)(II), by striking and
at the end;
in clause (iii), by striking the period at the end and inserting ; and
; and
by adding at the end the following:
periodically assess the ease of access for market participants with respect to the physical settlement of any commodity, regardless of the geographic location within the United States, to ensure system availability and resiliency.
in subparagraph (L)(iii)—
in subclause (IV), by striking and
at the end;
by redesignating subclause (V) as subclause (VI); and
by inserting after subclause (IV) the following:
conditions for applying to, and receiving approval from, the derivatives clearing organization as a metal service provider, such as a depository for the storage of precious metals; and
in subparagraph (N)(i), by inserting , including with respect to the approval of a metal service provider, such as a depository for the storage of precious metals
after trade
.