,,ii #aagth ,,congress #b;d ,session ,s4 #ebhf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ae1 #bjbb,ms4 ,lummis introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to provide for the strengthening of the supervision of digital asset markets by self-regulatory organizations1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,responsible ,self-,regulation ,act of #bjbb4 #b4 ,definitions 7a7 ,in general ,subtitle ,,vi of title #ca1 ,united ,states ,code1 is amended by adding after chapter #ig the following3 #ih ,digital assets ,sec4 #ihja4 ,definitions4 #ihja4 ,definitions ,in this chapter3 7#a7 ,ancillary asset 7,a7 ,in general ,the term ancillary asset means an intangible1 fungible asset that is offered1 sold1 or otherwise provided to a person in connection with the purchase and sale of a security through an arrangement or scheme that constitutes an investment contract1 as that term is used in section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a774 7,b7 ,exclusion ,the term ancillary asset does not include an asset that provides the holder of the asset with any of the following rights in a business entity3 7i7 ,a debt or equity interest in that entity4 7ii7 ,liquidation rights with respect to that entity4 7iii7 ,an entitlement to an interest or dividend payment from that entity4 7iv7 ,a profit or revenue share in that entity solely from the entrepreneurial or managerial efforts of others4 7v7 ,any other financial interest in that entity4 7#b7 ,appropriate commission ,the term appropriate commission means the ,commodity ,futures ,trading ,commission or the ,securities and ,exchange ,commission1 or both1 as applicable1 based on the commission that has statutory jurisdiction over a digital asset intermediary and acts as the primary registration or licensing authority1 consistent with paragraph 7#d74 7#c7 ,digital asset ,the term digital asset-- 7,a7 means a natively electronic asset that-- 7i7 confers economic1 proprietary1 or access rights or powers2 and 7ii7 is recorded using cryptographically secured distributed ledger technology1 or any similar analogue2 and 7,b7 includes-- 7i7 virtual currency and ancillary assets2 7ii7 payment stablecoins2 and 7iii7 any other security or commodity that meets the requirements of subparagraph 7,a74 7#d7 ,digital asset intermediary ,the term digital asset intermediary-- 7,a7 means-- 7i7 a person that-- 7,i7 holds a license1 registration1 or other similar authorization1 as specified by this chapter1 the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a et seq471 the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,corporation of ,foreign ,bondholders ,act1 #aicc 7#ae ,u4,s4,c4 #gg;bb et seq471 the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,securities ,investor ,protection ,act of #aigj 7#ae ,u4,s4,c4 #gh;aaa et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a71 and the ,omnibus ,small ,business ,capital ,formation ,act of #aihj 7#ae ,u4,s4,c4 #hj;c72 and 7,,ii7 may conduct market activities relating in digital assets2 or 7ii7 a person that is required by law to hold a license1 registration1 or other similar authorization described in clause 7i72 7,b7 includes-- 7i7 a person that holds a license1 registration1 or other similar authorization under ,state or ,federal law and issues a payment stablecoin2 and 7ii7 a person that is required by law to hold a license1 registration1 or other similar authorization described in clause 7i72 and 7,c7 does not include a depository institution4 7#e7 ,registered digital asset association ,the term registered digital asset association means an organization jointly registered by the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission under section #ihjb for the supervision of digital asset intermediaries4 7#f7 ,security ,the term security has the meaning given the term in section #c7;a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a774 7#g7 ,virtual currency ,the term virtual currency-- 7,a7 means a digital asset that-- 7i7 is used primarily as a medium of exchange1 unit of account1 store of value1 or any combination of such functions2 7ii7 is not legal tender1 as described in section #eajc2 and 7iii7 does not derive value from1 or is not backed by1 an underlying financial asset 7except other digital assets72 and 7,b7 includes a digital asset1 consistent with subparagraph 7,a71 that is accompanied by a statement from the issuer that a denominated or pegged value will be maintained and be available upon redemption from the issuer or other identified person1 based solely on computer code deployed to a distributed ledger technology network that executes an instruction based on the occurrence or non-occurrence of a specified condition1 or any similar analogue4 4 7b7 ,technical and conforming amendment ,the table of contents for subtitle ,,vi of title #ca1 ,united ,states ,code1 is amended by adding at the end the following3 #ih4 ,digital assets#ihja 4 #c4 ,registered digital asset associations 7a7 ,in general ,chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #b1 is amended by adding at the end the following3 #ihjb4 ,registered digital asset associations 7a7 ,definitions ,in this section3 7#a7 ,nonmember professional ,the term nonmember professional means any person that-- 7,a7 is a digital asset intermediary2 and 7,b7 is a not a member of a registered digital asset association or affiliated organization4 7#b7 ,registration information ,the term registration information means the information reported in connection with the licensing1 registration1 or other authorization of digital asset intermediaries and their associated persons1 including-- 7,a7 disciplinary actions1 regulatory1 judicial1 and arbitration proceedings1 and other information required by law or digital asset association rule2 and 7,b7 the source and status of the information described in subparagraph 7,a74 7b7 ,registration2 application ,an association of digital asset intermediaries may be registered as a digital asset association1 under the terms and conditions provided in this section1 and in accordance with the provisions of this section and section #ihjc1 by jointly filing with the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission an application for registration1 in such form as the commissions may require1 containing the rules of the association and such other information and documents that may be prescribed as necessary or appropriate in the public interest or for customer protection4 7c7 ,determinations by ,commissions requisite to registration ,an association of digital asset intermediaries may not be registered as a registered digital asset association under subsection 7b7 unless a majority of the members of each of the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission1 voting separately1 determine that-- 7#a7 by reason of the number and the scope of the transactions of the association1 the association will be able to carry out the purposes of this section2 7#b7 the association is so organized1 and has the capacity1 to-- 7,a7 be able to carry out the purposes of this section and other applicable ,state and ,federal laws2 and 7,b7 subject to any rule or order of the appropriate commission1 enforce compliance by members of the association 7and persons associated with those members7 with the provisions of applicable law1 the rules under those provisions1 and the rules of the association2 7#c7 the rules of the association provide that any digital asset intermediary may become a member of the association and any person may become associated with a member of the association2 7#d7 the rules of the association ensure a fair representation of the members of the association1 including emerging growth companies 7as defined in section #b7;a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a7771 in the selection of the directors of the association and administration of the affairs of the association2 7#e7 the rules of the association provide for the equitable allocation of reasonable dues1 fees1 and other charges among members of the association and other persons using any facility or system that the association operates or controls2 7#f7 the rules of the association-- 7,a7 are designed to-- 7i7 prevent fraudulent and manipulative acts and practices in order to promote just and equitable principles of trade2 7ii7 foster cooperation and coordination with persons engaged in regulating1 clearing1 settling1 processing information with respect to1 and facilitating transactions in digital assets2 7iii7 remove impediments to1 and perfect the mechanism of1 a free and open market2 and 7iv7 protect customers and the public interest2 and 7,b7 are not designed to-- 7i7 permit unfair discrimination between customers and digital asset intermediaries2 7ii7 fix minimum profits2 7iii7 impose any schedule or fix rates of commissions1 allowances1 discounts1 or other fees to be charged by the members of the association2 or 7iv7 regulate by virtue of any authority conferred by law matters not related to the purposes of this section or the administration of the association2 7#g7 the rules of the association provide that1 subject to any rule or order of the appropriate commission1 the members of the association 7and persons associated with those members7 shall be appropriately disciplined for a violation of any provision of applicable law1 the rules under such a provision1 or the rules of the association by expulsion1 suspension1 limitation of activities1 functions1 and operations1 fine1 censure1 a suspension or bar from being associated with a member1 or any other fitting sanction2 7#h7 the rules of the association are consistent with the provisions of subsection 7h7 and1 in general1 provide a fair procedure for-- 7,a7 the disciplining of members and persons associated with members2 7,b7 the denial of membership to any person seeking membership in the association2 7,c7 the barring of any person from becoming associated with a member of the association2 and 7,d7 the prohibition or limitation by the association of any person with respect to access to services offered by the association or a member of the association2 7#i7 the rules of the association do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of this section2 7#aj7 the requirements of subsection 7d71 as applicable1 are satisfied2 and 7#aa7 the rules of the association include provisions governing the form and content of quotations relating to digital assets1 which shall be designed to-- 7,a7 produce fair and informative quotations2 7,b7 prevent fictitious or misleading quotations2 and 7,c7 promote orderly procedures for collecting1 distributing1 and publishing quotations4 7d7 ,rules2 provision for registration of affiliated organization 7#a7 ,in general ,the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission may permit or require the rules of an association applying for registration under subsection 7b7 to provide for the admission of an organization registered as an affiliated organization pursuant to subsection 7e71 to participate in the applicant association as an affiliate of the applicant association1 under terms permitting powers and responsibilities to the affiliate1 and under such other appropriate terms and conditions1 as may be provided by the rules of the applicant association1 if those rules appear to the commissions jointly to be necessary or appropriate in the public interest or for customer protection and to carry out the purposes of this section4 7#b7 ,duties and powers of the commissions ,the duties and powers of the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission with respect to any association or affiliate organization shall in no way be limited by reason of any such affiliation4 7e7 ,registration as affiliated organization2 prerequisites2 association rules 7#a7 ,in general ,an applicant organization shall not be registered as an affiliated organization1 unless-- 7,a7 the organization1 notwithstanding that the organization does not satisfy the requirements under subsection 7c77#a71 will1 upon the registration of the organization under this subsection1 be admitted to affiliation with an organization registered as a digital asset association pursuant to subsection 7c71 in the manner and under the terms and conditions provided by the rules of the registered digital asset association in accordance with subsection 7d72 and 7,b7 the organization and the rules of the organization satisfy the requirements under paragraphs 7#b7 through 7#aa7 of subsection 7c74 7#b7 ,exception ,any restrictions upon membership of an applicant organization shall not be less stringent than in the case of the registered digital asset association with which the organization is to be affiliated4 7f7 ,dealings with nonmember professionals 7#a7 ,in general ,the rules of a digital asset association may provide that no member of the association may deal with any nonmember professional except at the same prices1 for the same commissions or fees1 and on the same terms and conditions the member accords to the general public4 7#b7 ,rule of construction ,nothing in this subsection may be construed to prevent any member of a registered digital asset association from granting to any other member of any other registered digital asset association any discount1 allowance1 commission1 or special terms in connection with a digital asset transaction4 7g7 ,denial of membership 7#a7 ,in general ,membership in a registered digital asset association under this section shall be limited to digital asset intermediaries4 7#b7 ,denial for public interest or consumer protection 7,a7 ,in general ,a registered digital asset association may1 and the appropriate commission1 by order1 may direct such an association to1 as necessary or appropriate in the public interest or for customer protection1 deny membership to any person1 and bar from becoming associated with a member any person1 that is subject to a statutory disqualification within the laws under the jurisdiction of that commission4 7,b7 ,notice ,a registered digital asset association shall file notice with the appropriate commission1 in such form and containing such information as the appropriate commission shall require1 not less than #cj days before admitting any person to membership or permitting any person to become associated with a member1 if the association knew1 or in the exercise of reasonable care should have known1 that such person was subject to a statutory disqualification4 7#c7 ,procedure 7,a7 ,in general ,a registered digital asset association may-- 7i7 deny membership to1 or condition the membership of1 a digital asset intermediary1 if-- 7,i7 the intermediary does not meet such standards of financial responsibility or operational capability1 or such intermediary or any individual associated with the intermediary does not meet such standards of training1 experience1 and competence1 as are prescribed by the rules of the association2 or 7,,ii7 the intermediary or person associated with the intermediary has engaged1 and there is a reasonable likelihood the intermediary or person will again engage1 in acts or practices inconsistent with just and equitable principles of trade2 and 7ii7 examine and verify the qualifications of an applicant to become a member and the individuals associated with the applicant in accordance with procedures established by the rules of the association4 7,b7 ,association ,a registered digital asset association may-- 7i7 bar an individual from becoming associated with a member1 or condition the association of an individual with a member1 if that individual-- 7,i7 does not meet such standards of training1 experience1 and competence as are prescribed by the rules of the association2 or 7,,ii7 has engaged1 and there is a reasonable likelihood the individual will again engage1 in acts or practices inconsistent with just and equitable principles of trade2 7ii7 examine and verify the qualifications of an applicant to become a person associated with a member in accordance with procedures established by the rules of the association2 and 7iii7 require an individual associated with a member1 or any class of such individuals1 to be registered with the association in accordance with procedures so established4 7,c7 ,bar on association ,a registered digital asset association may bar any person from becoming associated with a member if that person does not agree-- 7i7 to supply the association with such information with respect to the relationship and dealings of the person with the member as may be specified in the rules of the association2 and 7ii7 to permit examination of the records of the person to verify the accuracy of any information supplied by the person under clause 7i74 7#d7 ,denial for type of business 7,a7 ,in general ,subject to subparagraph 7,b71 a registered digital asset association may deny membership to a digital asset intermediary not engaged in a type of business in which the rules of the association require members to be engaged4 7,b7 ,condition ,no digital asset association may deny membership to a digital asset intermediary by reason of the amount of such type of business done by such intermediary or the other types of business in which the intermediary is engaged4 7h7 ,discipline of registered digital asset association members and persons associated with members2 summary proceedings 7#a7 ,discipline 7,a7 ,notification ,in any proceeding by a registered digital asset association to determine whether a member1 or a person associated with a member1 should be disciplined 7other than a summary proceeding pursuant to paragraph 7#c771 the association shall bring specific charges1 notify such member or person of 7and give the person an opportunity to defend against7 those charges1 and keep a record4 7,b7 ,statement ,a determination by a registered digital asset association to impose discipline in a proceeding under subparagraph 7,a7 shall be supported by a statement setting forth-- 7i7 any act or practice in which the member1 or person associated with a member1 has been found to have engaged1 or that such member or person has been found to have omitted2 7ii7 the specific provision of law1 the rules under such a provision1 or the rules of the association that an act or practice described in clause 7i71 or omission to act1 is charged with violating2 and 7iii7 the sanction imposed and a justification for the sanction4 7#b7 ,denial of membership or services 7,a7 ,notification ,in any proceeding by a registered digital asset association to determine whether a person shall be denied membership1 barred from becoming associated with a member1 or prohibited or limited with respect to access to services offered by the association or a member of the association 7other than a summary proceeding pursuant to paragraph 7#c771 the association shall-- 7i7 notify that person and give the person an opportunity to be heard2 7ii7 provide the person the specific grounds for denial1 bar1 or prohibition or limitation under consideration2 and 7iii7 maintain a record4 7,b7 ,statement ,a determination by a registered digital asset association to deny membership1 bar a person from becoming associated with a member1 or prohibit or limit a person with respect to access to services offered by the association or a member under subparagraph 7,a7 shall be supported by a statement setting forth the specific grounds on which the denial1 bar1 or prohibition or limitation is based4 7#c7 ,summary proceeding 7,a7 ,in general ,a registered digital asset association may summarily-- 7i7 suspend a member of the association1 or a person associated with such a member1 that is-- 7,i7 expelled or suspended from any other digital asset association2 or 7,,ii7 barred or suspended from being associated with a member of another digital asset association2 7ii7 suspend a member of the association that is in such financial or operating difficulty that the association determines 7and so notifies the appropriate commission7 that the member cannot be permitted to continue to do business as a member1 in order to protect customers1 creditors1 other members1 or the association2 or 7iii7 limit or prohibit any person from accessing services offered by the association if clause 7i7 or 7ii7 is applicable to that person1 or1 in the case of a person that is not a member of the association1 if the association determines that the person-- 7,i7 does not meet the qualification requirements or other prerequisites for that access2 and 7,,ii7 cannot be permitted to continue to have such access with safety1 in order to protect customers1 creditors1 members1 or the association4 7,b7 ,opportunity for hearing ,any person aggrieved by a summary action under subparagraph 7,a7 shall be promptly afforded an opportunity for a hearing by the applicable digital asset association in accordance with the provisions of paragraph 7#a7 or 7#b74 7,c7 ,stay ,the appropriate commission1 by order1 may stay a summary action described in subparagraph 7,a7 on the motion of the commission or upon application by any person aggrieved by the summary action1 if the commission determines summarily or after notice and opportunity for hearing 7which may consist solely of the submission of affidavits or presentation of oral arguments7 that the stay is consistent with the public interest and customer protection4 7i7 ,obligation ,to maintain registration1 disciplinary1 and other data 7#a7 ,maintenance of system to respond to inquiries ,a registered digital asset association shall establish and maintain-- 7,a7 a system for collecting and retaining registration information2 and 7,b7 a website1 including an application programming interface1 to receive and promptly respond to inquiries regarding registration information on the members of the association and associated persons with respect to those members4 7#b7 ,recovery of costs ,a registered digital asset association may charge persons making inquiries described in paragraph 7#a77;,b71 other than individual customers of digital asset intermediaries1 reasonable fees for responses4 7#c7 ,process for disputed information ,each registered digital asset association shall adopt rules establishing a process for disputing the accuracy of information provided in response to inquiries under this subsection4 7#d7 ,limitation on liability ,a registered digital asset association1 or any digital asset intermediary reporting information to such an association1 shall not have any liability to any person for any actions taken or omitted in good faith under this subsection4 7j7 ,avoidance of duplicative rules 7#a7 ,in general ,each digital asset association registered under subsection 7b7 shall issue rules as necessary to avoid duplicative or conflicting rules applicable to any digital asset intermediary that is a member of a national securities exchange1 board of trade1 contract market1 registered securities association1 registered futures association1 or similar digital asset association4 7#b7 ,other membership ,a digital asset intermediary shall not be required to become a member of another digital asset association unless the intermediary performs activities with financial assets other than digital assets4 7#c7 ,non-digital asset activities 7,a7 ,rules by ,commissions ,the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission shall jointly prescribe rules under which a digital asset intermediary that is a member or affiliate of a digital asset association registered under this section may perform activities with financial assets other than digital assets1 if those activities are not a majority of the business of an intermediary and are conducted in a responsible manner1 without membership in another digital asset association4 7,b7 ,rules by digital asset associations ,a registered digital asset association under this section shall adopt rules governing activities with financial assets other than digital assets1 which shall be consistent with existing law1 rule1 guidance or industry best practices or the rules of other digital asset associations4 4 7b7 ,technical and conforming amendment ,the table of sections for chapter #ih of title #ca1 ,united ,states ,code1 as added by section #b1 is amended by adding at the end the following3 #ihjb4 ,registered digital asset associations4 4 #d4 ,registration1 rulemaking1 and supervision of digital asset associations 7a7 ,in general ,chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #c1 is amended by adding at the end the following3 #ihjc4 ,registration1 rulemaking1 and supervision of digital asset associations 7a7 ,registration procedures2 notice of filing2 other regulatory agencies 7#a7 ,publication of notice 7,a7 ,in general ,the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission shall1 upon the filing of an application for registration as a digital asset association under section #ihjb1 publish notice of that filing and afford interested persons an opportunity to submit written data1 views1 and arguments concerning the application4 7,b7 ,requirements ,not later than #ij days after the date on which notice is published under subparagraph 7,a71 or within a longer period to which the applicable applicant consents1 the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission shall-- 7i7 by joint order1 grant registration of the digital asset association2 or 7ii7 institute proceedings to determine whether registration should be denied4 7,c7 ,proceedings 7i7 ,in general ,proceedings instituted under subparagraph 7,b77ii7 shall include notice of the grounds for denial under consideration and opportunity for hearing before the joint commissions4 7ii7 ,hearing ,a hearing described in clause 7i7 shall be concluded not later than #ahj days after the date on which notice of the filing of the application for registration is published under subparagraph 7,a74 7iii7 ,further proceedings 7,i7 ,separate votes ,at the conclusion of a hearing conducted under this subparagraph1 and not later than the end of the #ahj-;day period described in clause 7ii71 the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission1 voting separately1 shall act to grant or deny the applicable registration4 7,,ii7 ,effect of failure to issue joint order ,the failure of the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission to issue a joint order during the period described in subclause 7,i7 shall be deemed to be a denial of the applicable registration4 7,d7 ,considerations ,with respect to an application for registration described in this paragraph1 the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission shall-- 7i7 grant registration if all statutory requirements have been met and the rules under those statutory provisions with respect to the applicant are satisfied2 and 7ii7 deny such registration if the commissions do not make the findings described in clause 7i74 7#b7 ,withdrawal from registration 7,a7 ,in general ,a digital asset association may1 upon such terms and conditions as the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission1 by rule1 determine necessary or appropriate in the public interest or for the protection of customers1 withdraw from registration described in paragraph 7#a7 by filing a written notice of withdrawal with the commissions4 7,b7 ,considerations 7i7 ,in general ,if the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission1 voting separately1 each finds that a digital asset association is no longer in existence or has ceased to do business in the capacity specified in the application for registration submitted by the association1 the commissions may cancel the registration of the association4 7ii7 ,effect of failure to vote ,the failure to issue a joint order described in clause 7i7 shall be deemed to maintain the registration of the applicable digital asset association4 7,c7 ,effect of withdrawal1 cancellation1 suspension1 or revocation ,upon withdrawal by registration or the cancellation1 suspension1 or revocation of the registration of a digital asset association1 the registration of any association affiliated with the association shall automatically terminate4 7b7 ,proposed rule changes2 notice2 proceedings 7#a7 ,in general ,except as otherwise provided in paragraph 7#b7-- 7,a7 a digital asset association shall file with the appropriate commission1 in accordance with the rules of that commission1 copies of any proposed rule or any proposed change in1 addition to1 or deletion from the rules of such digital asset association accompanied by a concise general statement of the basis and purpose of such proposed rule change2 7,b7 the appropriate commission shall-- 7i7 as soon as practicable after the date on which a proposed rule change is filed under subparagraph 7,a71 publish notice of that filing together with the terms of substance of the proposed rule change or a description of the subjects and issues involved2 and 7ii7 give interested persons an opportunity to submit written data1 views1 and arguments concerning that proposed rule change2 7,c7 no proposed rule change described in subparagraph 7,a7 shall take effect unless approved by the appropriate commission or otherwise permitted in accordance with the provisions of this subsection2 and 7,d7 no proposed rule change described in subparagraph 7,a7 relating to a matter under the jurisdiction of more than #a commission may be filed4 7#b7 ,approval process 7,a7 ,approval process established 7i7 ,in general ,except as provided in clause 7ii71 not later than #cj days after the date on which notice of a proposed rule change is published under paragraph 7#a71 the appropriate commission shall-- 7,i7 by order1 approve or disapprove the proposed rule change2 or 7,,ii7 institute proceedings under subparagraph 7,b7 to determine whether the proposed rule change should be disapproved4 7ii7 ,extension of time period ,the appropriate commission may extend the period established under clause 7i7 by not more than an additional #cj days1 if-- 7,i7 the commission determines that a longer period is appropriate and publishes the reasons for that determination2 or 7,,ii7 the digital asset association that filed the proposed rule change consents to a longer period4 7,b7 ,proceedings 7i7 ,notice and hearing ,if the appropriate commission does not approve or disapprove a proposed rule change under subparagraph 7,a71 the commission shall provide to the digital asset association that filed the proposed rule change-- 7,i7 notice of the grounds for disapproval under consideration2 and 7,,ii7 opportunity for hearing1 to be concluded not later than #ahj days after the date of publication of notice of the filing of the proposed rule change4 7ii7 ,order of approval or disapproval 7,i7 ,in general ,except as provided in subclause 7,,ii71 not later than #ahj days after the date on which notice is published under paragraph 7#a71 the appropriate commission shall issue an order approving or disapproving the proposed rule change that is the subject of the notice4 7,,ii7 ,extension of time period ,the appropriate commission may extend the period for issuance under clause 7,i7 by not more than #fj days1 if-- 7aa7 the commission determines that a longer period is appropriate and publishes the reasons for such determination2 or 7bb7 the digital asset association that filed the proposed rule change consents to the longer period4 7,c7 ,standards for approval and disapproval 7i7 ,approval ,the appropriate commission shall approve a proposed rule change of a digital asset association if the commission finds that the proposed rule change is consistent with law4 7ii7 ,time for approval ,the appropriate commission may not approve a proposed rule change earlier than #cj days after the date of publication of notice with respect to the proposed rule change under paragraph 7#a71 unless the commission finds good cause for so doing and publishes the reason for the finding4 7,d7 ,result of failure to institute or conclude proceedings ,a proposed rule change shall be deemed to have been approved by the appropriate commission1 if-- 7i7 the commission does not approve or disapprove the proposed rule change1 or begin proceedings under subparagraph 7,b71 within the period described in subparagraph 7,a72 or 7ii7 the commission does not issue an order approving or disapproving the proposed rule change under subparagraph 7,b7 within the period described in subparagraph 7,b77ii74 7,e7 ,publication date based on federal register publishing 7i7 ,in general ,for purposes of this paragraph1 if1 after filing a proposed rule change with the appropriate commission under paragraph 7#a71 a digital asset association publishes a notice of the filing of that proposed rule change1 together with the substantive terms of that proposed rule change1 on a publicly accessible website1 the commission shall send the notice to the ,federal ,register for publication of the proposed rule change under paragraph 7#a7 not later than #e days after the date on which that website publication is made4 7ii7 ,effect of failing to send ,if the appropriate commission fails to send notice under clause 7i7 during the #e-;day period described in that clause1 the date of publication shall be deemed to be the date on which the applicable website publication is made4 7#c7 ,internal governance ,with respect to a proposed rule relating to the internal operation1 governance1 and procedures of a digital asset association1 or a proposed rule relating to the determination of the legal character of a digital asset-- 7,a7 the proposed rule shall be-- 7i7 subject to approval by the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission2 and 7ii7 deemed to be approved on the date that is #e days after the date on which the proposed rule is submitted1 unless either commission objects to the proposed rule change2 and 7,b7 if a commission objects to the proposed rule change under subparagraph 7,a77ii7-- 7i7 the commission shall1 in a public format1 provide to the digital asset association and the non-objecting commission the reasons for the objection2 7ii7 the digital asset association1 and interested members of the public1 may provide written comments to the commissions during the #bj-;day period beginning on the date on which the objection is noted2 and 7iii7 the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission1 voting separately1 shall jointly issue an order approving or disapproving the proposed rule1 with the failure to issue such a joint order being deemed to be approval of the proposed rule4 7#d7 ,exception 7,a7 ,in general ,notwithstanding paragraphs 7#b7 and 7#c71 a proposed rule change shall take effect upon filing if self-certified by a digital asset association as-- 7i7 constituting a stated policy1 practice1 or interpretation with respect to the meaning1 administration1 or enforcement of an existing rule of the digital asset association2 7ii7 establishing or changing a due1 fee1 or other charge imposed by the digital asset association on any person1 whether or not the person is a member of the digital asset association2 or 7iii7 notwithstanding any other provision of this subsection1 necessary for customer protection1 the maintenance of fair and orderly markets1 or the safeguarding of digital assets1 customer funds1 or other property1 in which case the proposed rule change under shall be filed promptly thereafter in accordance with paragraph 7#a74 7,b7 ,enforcement 7i7 ,in general ,any proposed rule change of a digital asset association that has taken effect under subparagraph 7,a7 may be enforced by the association to the extent the rule change is not inconsistent with applicable law4 7ii7 ,suspension 7,i7 ,in general ,at any time during the #fj-;day period beginning on the date on which a proposed rule change is filed under paragraph 7#a71 the appropriate commission may temporarily and summarily suspend the change in the rules of the applicable digital asset association on a temporary basis1 if the commission determines that such action is necessary or appropriate in the public interest1 for customer protection1 or to otherwise comply with applicable law4 7,,ii7 ,requirements ,if a commission takes action under subclause 7,i71 the commission shall institute proceedings under paragraph 7#b77;,b7 to determine whether the applicable proposed rule should be approved or disapproved4 7iii7 ,rule of construction ,action under this subparagraph shall not affect the validity or force of a proposed rule change during the period the rule change was in effect and shall not be reviewable in a judicial proceeding1 nor deemed to be final agency action for purposes of section #gjd of title #e4 7#e7 ,rule of construction relating to filing date of proposed rule changes 7,a7 ,in general ,for purposes of this subsection1 the date of filing of a proposed rule change shall be deemed to be the date on which the applicable commission receives the proposed rule change4 7,b7 ,exception 7i7 ,in general ,subject to clause 7ii71 a proposed rule has not been received by the applicable commission for purposes of subparagraph 7,a71 if1 not later than #g business days after the date on which the commission receives the rule1 the commission notifies the applicable digital asset association that the proposed rule change does not comply with the rules of the commission relating to the required form of a proposed rule change4 7ii7 ,lengthy and complex proposed rule changes 7,i7 ,in general ,if the applicable commission determines that a proposed rule change is unusually lengthy1 and is complex or raises novel regulatory issues1 the commission shall inform the applicable digital asset association of that determination not later than #g business days after the date on which the commission receives the rule4 7,,ii7 ,deadline ,for the purposes of subparagraph 7,a71 a proposed rule change described in subclause 7,i7 has not been received by the applicable commission1 if1 not later than #ba days after the date on which the commission receives the rule1 the commission notifies the applicable digital asset association that the proposed rule change does not comply with the rules of the commission relating to the required form of a proposed rule change4 7,c7 ,applicability ,this paragraph shall not apply to a rule relating to the internal operations1 governance1 and procedure of a digital asset association4 7c7 ,amendment of rules of digital asset associations 7#a7 ,in general ,the appropriate commission may1 by rule1 abrogate1 add to1 and delete from the rules of a digital asset association as the commission determines necessary or appropriate to ensure the fair administration of the digital asset association or to conform the rules of the association to law or applicable rule1 in the following manner3 7,a7 ,the appropriate commission shall notify the digital asset association and publish notice of the proposed rulemaking in the ,federal ,register1 which shall include the text of the proposed amendment to the rules of the digital asset association and a statement of the reasons of the commission1 including any pertinent facts1 for commencing the proposed rulemaking4 7,b7 7i7 ,the appropriate commission shall give interested persons an opportunity for the oral presentation of data1 views1 and arguments1 in addition to an opportunity to make written submissions4 7ii7 ,a transcript shall be kept of any oral presentation under clause 7i74 7,c7 ,a rule adopted pursuant to this paragraph shall incorporate the text of the amendment to the rules of the digital asset association and a statement of the appropriate commission regarding the basis for amendment of the rule1 which shall include an identification of any facts on which the determination of the commission to amend the rules of the digital asset association is based1 including the reasons for the conclusions of the commission relating to any facts that were disputed in the rulemaking4 7#b7 ,rule of construction ,nothing in this subsection may be construed to impair or limit the authority of the appropriate commission to make1 or to modify or alter the procedures the commission may follow in making1 rules pursuant to any other authority granted by law that is consistent with this subsection4 7#c7 ,effect of rules ,any amendment to the rules of a digital asset association made by the appropriate commission under this subsection shall be considered for all purposes to be part of the rules of that digital asset association and shall not be considered to be a rule of the commission4 7#d7 ,consultations ,with respect to rules described in subsection 7b77#d77;,a77iii71 the appropriate commission shall consult with and consider the views of the other commission and the ,secretary of the ,treasury before abrogating1 adding to1 and deleting from those rules1 except where the commission determines that an emergency exists requiring expeditious or summary action and publishes the reasons of the commission for taking that action4 7d7 ,notice of disciplinary action taken by digital asset association against a member or participant2 review of action by appropriate commission2 procedure 7#a7 ,in general ,if a digital asset association imposes any final disciplinary sanction on any member of the association1 or any participant with respect to the association1 denies membership or participation to any applicant1 prohibits or limits any person from accessing services offered by the association or a member of the association1 imposes any final disciplinary sanction on any person associated with a member1 or bars any person from becoming associated with a member1 the digital asset association shall promptly file notice of that action with the appropriate commission4 7#b7 ,review 7,a7 ,in general ,any action with respect to which a digital asset association is required to file notice under paragraph 7#a7 shall be subject to review by the appropriate commission for the applicable member1 participant1 applicant1 or other person1 on its own motion1 or upon application by any person aggrieved by that action if filed not later than #cj days after the date on which the notice was filed with the appropriate commission and received by the aggrieved person1 or within such longer period as the appropriate commission may determine4 7,b7 ,application ,application to the appropriate commission for review1 or the institution of review by the commission on its own motion1 shall not operate as a stay of an action described in subparagraph 7,a7 unless the appropriate commission otherwise orders1 summarily or after notice and opportunity for hearing on the question of a stay1 which may consist solely of the submission of affidavits or presentation of oral arguments4 7,c7 ,stays ,for the purposes of this paragraph1 each of the appropriate commissions shall establish for appropriate cases an expedited procedure for consideration and determination of the question of a stay4 7#c7 ,applicability ,this subsection shall apply only to the extent that a digital asset association imposes any final disciplinary sanction for-- 7,a7 a violation of ,federal law or the rules issued under ,federal law2 or 7,b7 a violation of a rule of the digital asset association1 as to which a proposed change would be required to be filed under this section4 7e7 ,disposition of review2 cancellation1 reduction1 or remission of sanction 7#a7 ,in general ,in any proceeding to review a final disciplinary sanction imposed by a digital asset association on a member of the association1 a participant with respect to the association1 or a person associated with such a member1 after notice and opportunity for hearing1 which may consist solely of consideration of the record before the digital asset association and opportunity for the presentation of supporting reasons to affirm1 modify1 or set aside the sanction-- 7,a7 if the appropriate commission finds that such member1 participant1 or person associated with a member has engaged in such acts or practices1 or has omitted such acts1 as the digital asset association has found that person to have engaged in or omitted1 that such acts or practices1 or omissions to act1 are in violation of law1 the rules thereunder1 or the rules of the digital asset association1 and that such provisions are1 and were applied in a manner1 consistent with law1 the commission1 by order1 shall-- 7i7 make a declaration regarding that finding2 and 7ii7 as appropriate-- 7,i7 affirm the sanction imposed by the digital asset association2 7,,ii7 modify the sanction in accordance with paragraph 7#b72 or 7,,iii7 remand to the digital asset association for further proceedings2 or 7,b7 if the appropriate commission does not make a finding described in subparagraph 7,a71 the commission shall1 by order-- 7i7 set aside the sanction imposed by the digital asset association2 and 7ii7 if appropriate1 remand to the digital asset association for further proceedings4 7#b7 ,modification ,if the appropriate commission for a member1 participant1 or person associated with a member1 having due regard for the public interest and customer protection1 finds1 after a proceeding under paragraph 7#a71 that a sanction imposed by a digital asset association upon that member1 participant1 or person associated with a member imposes any burden on competition not necessary or appropriate or is excessive or oppressive1 the commission may cancel1 reduce1 or require the remission of that sanction4 7f7 ,dismissal of review proceeding 7#a7 ,in general ,in any proceeding to review the denial of membership or participation in a digital asset association to any applicant1 the barring of any person from becoming associated with a member of a digital asset association1 or the prohibition or limitation by a digital asset association of any person from accessing services offered by the digital asset association or any member of the association1 if the appropriate commission1 after notice and opportunity for hearing1 which may consist solely of consideration of the record before the digital asset association and opportunity for the presentation of supporting reasons to dismiss the proceeding or set aside the action of the digital asset association1 finds that the specific grounds on which that denial1 bar1 or prohibition or limitation is based exist in fact1 that such denial1 bar1 or prohibition or limitation is in accordance with the rules of the digital asset association1 and that such rules are1 and were applied in a manner1 consistent with law1 the appropriate commission1 by order1 shall dismiss the proceeding4 7#b7 ,failure to make finding ,if the appropriate commission does not make a finding described in paragraph 7#a71 or if the commission finds that the applicable denial1 bar1 prohibition1 or limitation imposes any burden on competition not necessary or appropriate1 the commission1 by order1 shall set aside the action of the digital asset association and require the association to admit the applicable applicant to membership or participation1 permit that person to become associated with a member1 or grant that person access to services offered by the digital asset association or a member of the association4 7g7 ,suspension or revocation of digital asset association registration2 other sanctions 7#a7 ,in general ,if necessary or appropriate in the public interest1 for customer protection1 or otherwise in furtherance of the purposes of this section1 the appropriate commissions1 voting separately1 may issue a joint order suspending for a period not exceeding #a year or revoking the registration of a digital asset association1 or censuring or imposing limitations upon the activities1 functions1 and operations of a digital asset association1 if1 the commissions find1 on the record after notice and opportunity for hearing1 that the digital asset association-- 7,a7 has violated or is unable to comply with any provision of law1 rule1 or the rules of the association without reasonable justification or excuse2 or 7,b7 has failed to enforce compliance with any provision by a member of the association or a person associated with a member of the association4 7#b7 ,expulsion ,the appropriate commission may1 by order1 if necessary or appropriate in the public interest1 for customer protection1 or otherwise in furtherance of the purposes of this section1 to suspend for a period not exceeding #a year or expel from a digital asset association1 any member of a digital asset association1 or participant with respect to a digital asset association1 if such member or participant is subject to an order of the commission or if the commission1 on the record after notice and opportunity for hearing1 determines that the member or participant has willfully violated1 or has effected any transaction for any other person who the member or participant had reason to believe was violating1 with respect to such transaction any applicable provision of law under the jurisdiction of the commission4 7#c7 ,bar on association ,the applicable commission may1 by order1 if necessary or appropriate in the public interest1 for customer protection1 or otherwise in furtherance of the purposes of this section1 to suspend for a period not exceeding #a year or to bar any person from being associated with a member of such digital asset association1 if the person is subject to an order of the appropriate commission or if the appropriate commission finds1 on the record after notice and opportunity for hearing1 that the person has willfully violated1 or has effected any transaction for any other person who the person associated with a member had reason to believe was violating1 with respect to the transaction any applicable provision of law under the jurisdiction of the commission4 7#d7 ,removal from office ,if necessary or appropriate in the public interest1 for customer protection1 or otherwise in furtherance of the purposes of this section1 the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission1 voting separately1 may1 by joint order1 remove from office or censure any person who is1 or at the time of the alleged misconduct was1 an officer or director of a digital asset association1 if the commissions find1 on the record after notice and opportunity for a hearing before an impartial hearing officer1 that such person has willfully violated any provision of law1 the rules thereunder1 or the rules of such digital asset association1 willfully abused the authority of the person1 or without reasonable justification or excuse has failed to enforce compliance with any provision of law by any member or person associated with a member4 7h7 ,interagency working group ,the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission shall each appoint an equal number of employees1 under the supervision of the ,chairman of the respective commissions1 to an interagency working group1 which shall coordinate and facilitate the responsibilities and powers of the respective commissions under this chapter4 4 7b7 ,technical and conforming amendment ,the table of sections for chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #c1 is amended by adding at the end the following3 #ihjc4 ,registration1 rulemaking1 and supervision of digital asset associations4 4 #e4 ,records and reports2 duties and powers of registered digital asset associations 7a7 ,in general ,chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #d1 is amended by adding at the end the following3 #ihjd4 ,records and reports2 duties and powers of registered digital asset associations 7a7 ,in general ,each member of a registered digital asset association shall make1 and keep for prescribed periods1 such electronic records and disseminate reports as the registered digital asset association1 by rule1 prescribes as necessary or appropriate in the public interest4 7b7 ,records subject to examination 7#a7 ,procedures for cooperation with other agencies 7,a7 ,in general ,all records of a member described in subsection 7a7 are subject at any time1 or from time to time1 to reasonable periodic1 special1 or other examinations by the registered digital asset association of the member4 7,b7 ,notice ,before conducting an examination under subparagraph 7,a71 the examining authority shall-- 7i7 inform all other relevant regulatory agencies and digital asset associations with jurisdiction over the member regarding the proposed examination2 and 7ii7 consult concerning the feasibility and desirability of coordinating such examination with examinations conducted by other entities with a view to avoiding unnecessary duplication and undue regulatory burden4 7,c7 ,examinations of members ,upon a showing of good cause1 the ,securities and ,exchange ,commission or the ,commodity ,futures ,trading ,commission1 as applicable1 may conduct a special examination of a registered digital asset association or a member of such an association4 7,d7 ,report ,with respect to an examination under this paragraph1 the examining authority shall share such information1 including reports of the examination1 customer complaint information1 and other nonpublic regulatory information1 as may be appropriate to foster a coordinated approach to regulatory oversight for members that are subject to examination by more than #a examining authority4 7,e7 ,requirements when examination not ongoing ,a registered digital asset association1 at all times when an examination under this paragraph is not in progress1 shall conduct ongoing supervision of members of the association1 as may be provided by the rules of the association4 7#b7 ,clarification ,notwithstanding any other provision of this subsection1 the records of a member of a registered digital asset association shall not be subject to routine periodic examinations by the ,securities and ,exchange ,commission or the ,commodity ,futures ,trading ,commission4 7#c7 ,examination standards ,each registered digital asset association shall-- 7,a7 adopt tailored supervision and examination standards commensurate with the size and complexity of the association and risks faced by members of the association2 7,b7 to the extent reasonably possible1 reduce the regulatory burden for emerging growth companies1 as defined in section #b7;a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a771 including through the use of self-certification and expedited or automated examinations2 and 7,c7 in consultation with other registered digital asset associations1 develop standard form customer agreements for the execution of digital asset transactions4 7c7 ,registered digital asset associations 7#a7 ,in general ,the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission1 shall1 by rule or order1 in order to foster cooperation and coordination among registered digital asset associations-- 7,a7 with respect to any person that is a member of or participant in more than #a registered digital asset association1 relieve any registered digital asset association of any responsibility-- 7i7 to receive regulatory reports from the person2 7ii7 to examine the person for compliance2 or 7iii7 to carry out other specified regulatory functions with respect to the person2 and 7,b7 allocate among registered digital asset associations the authority to adopt rules with respect to matters as to which1 in the absence of the allocation1 such registered digital asset associations share authority4 7#b7 ,considerations 7,a7 ,in general ,in making a rule1 or entering an order1 under paragraph 7#a71 the appropriate commission shall take into consideration the regulatory capabilities and procedures of the applicable registered digital asset associations1 availability of staff1 convenience of location1 unnecessary regulatory duplication1 and all other factors applicable to customer protection1 cooperation and coordination among registered digital asset associations1 and the development of a healthy digital asset market1 which may include providing for the acceptance of examination reports prepared by a registered digital asset association under this chapter with respect to a digital asset intermediary for which digital asset activities constitute a majority of business1 in lieu of examinations conducted by other registered digital asset associations4 7,b7 ,notification requirement ,the ,securities and ,exchange ,commission or ,commodity ,futures ,trading ,commission1 by rule or order1 may require that a registered digital asset association relieved of any responsibility under this paragraph1 and any person with respect to which that responsibility relates1 to take such steps as are specified in any rule or order to notify customers of1 and persons doing business with1 the person of the limited nature of the responsibility of that registered digital asset association for the acts1 practices1 and course of business of the person4 7d7 ,missing and stolen digital assets ,each member of a registered digital asset association or other financial institution conducting digital asset transactions shall report to the ,financial ,crimes ,enforcement ,network of the ,department of the ,treasury such information as may be required by rule relating to digital asset theft or missing private keys for the possession or control of digital assets4 7e7 ,confidentiality 7#a7 ,sharing of information 7,a7 ,in general ,section #bd of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghx7 shall apply to the sharing of information by the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission in accordance with this subsection4 7,b7 ,protection from inappropriate disclosure ,the commissions and a registered digital asset association shall ensure that all confidential information is not inappropriately disclosed pursuant to subparagraph 7,a74 7#b7 ,appropriate disclosure not prohibited ,nothing in this subsection may be construed to authorize the ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission or a registered digital asset association to-- 7,a7 withhold information from ,congress2 or 7,b7 prevent the commissions or an association from complying with-- 7i7 a request for information from any ,federal or ,state department or agency requesting the information for purposes within the scope of the jurisdiction of that department or agency2 or 7ii7 an order of a court of the ,united ,states in an action brought by the ,united ,states or the commissions4 7f7 ,best execution ,a registered digital asset association1 in consultation with members of the association1 the ,securities and ,exchange ,commission1 and the ,commodity ,futures ,trading ,commission1 shall develop rules governing the best execution of digital asset transactions4 7g7 ,initial determination of legal character 7#a7 ,in general 7,a7 ,initial determination ,a registered digital asset association may make an initial determination of the legal character of a digital asset as a security1 an ancillary asset1 a commodity 7as defined in section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a771 or as otherwise provided by law1 upon the written request of a member of the association4 7,b7 ,consultation2 hearings ,upon receipt of a request under subparagraph 7,a71 a registered digital asset association-- 7i7 shall consult with the commissions and make an initial determination regarding the request1 after public notice and comment1 not later than #de days after the date on which the association receives the request2 and 7ii7 may hold a public hearing with respect to an initial determination described in clause 7i71 if-- 7,i7 the matter is of significant precedential value or complex2 or 7,,ii7 holding such a hearing is otherwise in the public interest4 7#b7 ,publication ,a registered digital asset association shall publish all determinations made under paragraph 7#a7 on the website of the association4 7h7 ,objection to initial determination 7#a7 ,in general 7,a7 ,deadline for objection ,not later than #cj days after the date on which an initial determination is made under subsection 7g71 the ,securities and ,exchange ,commission or ,commodity ,futures ,trading ,commission may object to the initial determination of the registered digital asset association by issuing an order1 after public notice1 comment1 and a hearing4 7,b7 ,effect of objection ,upon an objection under subparagraph 7,a71 the initial determination to which the objection applies shall be held in abeyance4 7#b7 ,order 7,a7 ,in general ,not later than #fj days after the date on which a commission objects under paragraph 7#a71 the commissions shall1 after public notice and comment of not less than #cj days1 issue an order resolving the objection and the status of the digital asset1 as described in subsection 7g77#a77;,a71 which may include joint responsibility of the commissions4 7,b7 ,failure to issue ,if the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission fail to issue a joint order under subparagraph 7,a71 the determination of the registered digital asset association under subsection 7g7 shall become final1 unless an action is brought in an appropriate district court of the ,united ,states of competent jurisdiction4 4 7b7 ,technical and conforming amendment ,the table of sections for chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #d1 is amended by adding at the end the following3 #ihjd4 ,records and reports2 duties and powers of registered digital asset associations4 4