Commodity Futures Trading Commission Research and Development Modernization Act

I 116TH CONGRESS 1ST SESSION H. R. 4535 To modernize the authority of the Commodity Futures Trading Commission to conduct research, development, demonstration, and information programs. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 26, 2019 Mr. AUSTIN SCOTT of Georgia (for himself, Mr. MARSHALL, Mr. JOHNSON of South Dakota, Mr. CRAWFORD, and Mr. BOST) introduced the fol- lowing bill; which was referred to the Committee on Agriculture A BILL To modernize the authority of the Commodity Futures Trad- ing Commission to conduct research, development, dem- onstration, and information programs. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Commodity Futures 4 Trading Commission Research and Development Mod- 5 ernization Act’’. 6 VerDate Sep 11 2014 21:51 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 4535 IH SEC. 2. MODERNIZATION OF AUTHORITY OF THE COM- 1 MODITY FUTURES TRADING COMMISSION TO 2 CONDUCT RESEARCH, DEVELOPMENT, DEM- 3 ONSTRATION, AND INFORMATION PRO- 4 GRAMS. 5 Section 18 of the Commodity Exchange Act (7 U.S.C. 6 22) is amended to read as follows: 7 ‘‘SEC. 18. RESEARCH, DEVELOPMENT, AND DEMONSTRA- 8 TION OF FINANCIAL TECHNOLOGY. 9 ‘‘(a) AUTHORITY.—The Commission shall establish 10 and maintain, as part of its ongoing operations, research, 11 development, demonstration, and information programs 12 that further the purposes and objectives of this Act, in- 13 cluding programs that— 14 ‘‘(1) facilitate the understanding by the Com- 15 mission of emerging financial, regulatory, and com- 16 pliance technologies, the potential applications of the 17 technologies to the transactions and markets regu- 18 lated by the Commission, and associated implications 19 for cybersecurity, data security, and systemic risk; 20 ‘‘(2) inform the Commission of important tech- 21 nological advances and innovations affecting markets 22 regulated by the Commission; 23 ‘‘(3) provide an environment where techno- 24 logical advances and innovations may be explored by 25 developers, potential users, and the Commission to 26 VerDate Sep 11 2014 21:51 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 4535 IH evaluate potential benefits to the Commission and 1 the markets regulated by the Commission; 2 ‘‘(4) identify areas where the Commission 3 should adapt its administration of this Act to facili- 4 tate technological advances and innovations that 5 would benefit the markets regulated by the Commis- 6 sion; 7 ‘‘(5) improve the administration of this Act by 8 the Commission by identifying technological ad- 9 vances and innovations, and developing novel tools 10 that are not generally available from traditional ven- 11 dors for use by the Commission, or any division or 12 office of the Commission; and 13 ‘‘(6) develop educational and other informa- 14 tional materials regarding derivatives trading, tech- 15 nological advances and innovations in markets regu- 16 lated by the Commission, and applicable require- 17 ments of this Act and the regulations prescribed 18 under this Act. 19 ‘‘(b) AUTHORIZED MEANS.—Notwithstanding any 20 other provision of law, the Commission may use the fol- 21 lowing authorities for the purpose of aiding or facilitating 22 the programs and activities under subsection (a): 23 ‘‘(1) OTHER TRANSACTION AUTHORITY.— 24 VerDate Sep 11 2014 21:51 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 4535 IH ‘‘(A) IN GENERAL.—The Commission may 1 enter into and perform a transaction (other 2 than a standard contract) on such terms and 3 conditions as the Chairman of the Commission 4 deems appropriate. 5 ‘‘(B) DETERMINATION.—The Commission 6 may only enter into a transaction under this 7 paragraph if the Chairman makes a written de- 8 termination that— 9 ‘‘(i) the transaction is only used in 10 furtherance of a research and development 11 plan established under subsection (c)(1); 12 ‘‘(ii) the transaction is executed in 13 compliance with the guidance promulgated 14 under subsection (c)(2); 15 ‘‘(iii) the Commission endeavored to 16 use a competitive process, where appro- 17 priate, when determining the parties to the 18 transaction; and 19 ‘‘(iv) using a standard contract to do 20 so is either not feasible or not appropriate. 21 ‘‘(2) GIFT ACCEPTANCE AUTHORITY.— 22 ‘‘(A) IN GENERAL.—Subject to this para- 23 graph, the Commission may accept and use, on 24 behalf of the United States, any non-monetary 25 VerDate Sep 11 2014 00:24 Oct 04, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 4535 IH gift, including any provision of access, use of 1 facilities, tangible or intangible personal prop- 2 erty, or services, that is related to— 3 ‘‘(i) sharing of research, data, or 4 other information; 5 ‘‘(ii) public presentations; or 6 ‘‘(iii) non-commercially available serv- 7 ices or systems. 8 ‘‘(B) DETERMINATION.—The Commission 9 may accept a gift only if the Chairman makes 10 a written determination that— 11 ‘‘(i) the acceptance and use of the gift 12 meets the requirements of this paragraph; 13 ‘‘(ii) the gift will be used only in fur- 14 therance of a research and development 15 plan established under subsection (c)(1); 16 ‘‘(iii) the gift is accepted in compli- 17 ance with the guidance promulgated under 18 subsection (c)(2); and 19 ‘‘(iv) using a standard contract or 20 other transaction to acquire the gift is ei- 21 ther not feasible or not appropriate. 22 ‘‘(C) LIMITATIONS.—The Commission may 23 not accept a gift if— 24 VerDate Sep 11 2014 21:51 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 4535 IH ‘‘(i) conditions inconsistent with appli- 1 cable laws or regulations apply to the gift; 2 or 3 ‘‘(ii) the gift is conditioned on, or will 4 require, the expenditure of appropriated 5 funds not available to the Commission. 6 ‘‘(D) SUNSET.—The authority provided by 7 subparagraph (A) may not be exercised on or 8 after October 1, 2024. 9 ‘‘(c) RESEARCH AND DEVELOPMENT PLAN; GUID- 10 ANCE.—Before using the means authorized in subsection 11 (b), the Commission shall— 12 ‘‘(1) approve a research and development plan 13 that furthers the goals of this section, by estab- 14 lishing— 15 ‘‘(A) the potential areas of interest to the 16 Commission; 17 ‘‘(B) the potential activities the Commis- 18 sion may undertake to investigate the potential 19 areas of interest; and 20 ‘‘(C) a general explanation of how the 21 means will assist the Commission in under- 22 standing the potential areas of interest; and 23 ‘‘(2) promulgate guidance on the appropriate 24 use of the means in order to— 25 VerDate Sep 11 2014 21:51 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 4535 IH ‘‘(A) prohibit the Commission or Commis- 1 sion staff from accepting or soliciting gifts, or 2 engaging in other transactions, which would un- 3 duly restrict or interfere with the work of the 4 Commission; 5 ‘‘(B) prevent the endorsement or the ap- 6 pearance of the endorsement by the Commis- 7 sion or Commission staff of the products, serv- 8 ices, activities, or policies of a donor or con- 9 tractor; and 10 ‘‘(C) preserve the integrity and independ- 11 ence of the Commission and Commission staff. 12 ‘‘(d) ANNUAL REPORT.—Not later than 60 days after 13 the end of each fiscal year, the Commission shall submit 14 to the Committee on Agriculture, Nutrition, and Forestry 15 of the Senate and the Committee on Agriculture of the 16 House of Representatives a report on all transactions en- 17 tered into, and all gifts accepted, under subsection (b) in 18 the fiscal year, which shall include the following: 19 ‘‘(1) A brief description of the subject of each 20 transaction or gift, with an explanation of— 21 ‘‘(A) its potential utility to the Commission 22 or the markets regulated by the Commission; 23 VerDate Sep 11 2014 21:51 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 4535 IH ‘‘(B) how it fulfills the goals and objectives 1 of the research and development plan estab- 2 lished under subsection (c)(1); and 3 ‘‘(C) the status of all related projects. 4 ‘‘(2) The written determination required by 5 subsection (b) with respect to each such transaction 6 or gift. 7 ‘‘(3) A description of all sums expended by the 8 Commission in connection with a transaction entered 9 into under subsection (b)(1), and, if readily ascer- 10 tainable, the value of any gift accepted under sub- 11 section (b)(2).’’. 12 Æ VerDate Sep 11 2014 21:51 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H4535.IH H4535 pamtmann on DSKBC07HB2PROD with BILLS