Commodity Futures Trading Commission Research and Development Modernization Act of 2025
- Sponsor
- Rep. Scott, Austin [R-GA-8]
- Committees
- Agriculture Committee (primary)
- Last action
- Jan 13, 2026
Bottom line
The bill grants the CFTC new flexible authorities to engage with emerging technologies and external partners for research and development, with built-in safeguards and reporting requirements.
What it actually does
This bill modernizes the Commodity Futures Trading Commission's (CFTC) authority to conduct research, development, demonstration, and information programs. It allows the CFTC to use 'other transaction authority' (OTAs) to bypass traditional procurement rules for R&D, and to accept non-monetary contributions from external entities for these programs, subject to specific conditions and reporting requirements. The aim is to enhance the CFTC's ability to understand and adapt to emerging technologies in financial markets.
Proponents argue
Supporters argue that this bill is crucial for enabling the CFTC to keep pace with the rapid technological advancements in commodity and financial markets, such as blockchain and artificial intelligence. They contend that traditional government procurement processes are too slow and rigid for engaging with cutting-edge technology developers, and that leveraging external expertise and non-monetary contributions will enhance the CFTC's regulatory effectiveness and market stability without increasing taxpayer burden.
Opponents contend
Critics might express concerns that the bill's 'other transaction authority' and ability to accept non-monetary contributions could reduce transparency and accountability in government dealings. They may argue that bypassing standard procurement rules could lead to favoritism or undue influence from private sector entities on the CFTC's research priorities and potentially future regulatory decisions, despite the proposed safeguards.
The bill is concise and relatively straightforward, allowing an informed reader to grasp its core provisions within a reasonable timeframe.
Section 2, amending Section 18(a) of the Commodity Exchange Act
Establishment of Research and Development Programs
This provision mandates the CFTC to establish and maintain research, development, demonstration, and information programs. These programs are designed to help the Commission understand emerging technologies, their impact on regulated markets (including cybersecurity and systemic risk), provide a platform for exploring these technologies with developers, identify areas for regulatory adaptation, and develop educational materials for market participants and the public.
Supporters argue
Supporters argue that these programs are essential for the CFTC to remain a relevant and effective regulator in an era of rapid technological change, ensuring market integrity and protecting participants from new risks associated with emerging technologies.
Critics contend
No specific opposition is typically raised against the general concept of a regulator conducting research and development, though concerns might arise regarding the scope or cost if not managed effectively.
Tradeoffs
The provision balances the need for regulatory foresight and adaptation with the potential for increased administrative burden on the CFTC.
Section 2, amending Section 18(b) of the Commodity Exchange Act
Research and Development Plan Requirement
This section allows the CFTC to adopt a formal research and development plan, either by rule or order. Any such plan must clearly identify specific areas of interest for the Commission, outline the activities it will undertake to investigate these areas, and specify how the 'Other Transaction Authority' (granted in subsection c) will be utilized within the established R&D programs.
Section 2, amending Section 18(c) of the Commodity Exchange Act
Other Transaction Authority (OTA) for R&D
This provision grants the CFTC the authority to enter into 'other transactions' (agreements that are not traditional contracts) for its R&D programs, bypassing standard federal procurement laws. This flexibility is permitted only if it furthers an R&D plan, the CFTC attempts a competitive process where appropriate, and a traditional contract is not feasible or appropriate. The CFTC is required to establish and publish written policies for using this authority.
Section 2, amending Section 18(d) of the Commodity Exchange Act
Acceptance of Non-Monetary Contributions
This section authorizes the CFTC to accept and use 'covered non-monetary contributions' (such as access, facilities, personal property, or services related to research, data sharing, or non-commercial systems) for its R&D programs. This authority is subject to strict conditions, including that it must further an R&D plan, not involve inconsistent conditions or unavailable funds, not be feasible via contract/OTA, and not compromise CFTC integrity or imply endorsement. The CFTC must return contributions when their purpose is met, establish written requirements, and report agreements to Congress within 14 days. This authority sunsets on October 1, 2031.
Section 2, amending Section 18(e) of the Commodity Exchange Act
Annual Reporting Requirement
This provision mandates that the CFTC submit an annual report to the House and Senate Agriculture Committees within 60 days after the end of each fiscal year. The report must detail all 'other transactions' and non-monetary contributions, including a brief description of their utility, how they align with the R&D plan, project status, the source and nature of contributions, how conditions were met, and the estimated value or sums expended.
This clause explicitly states that the CFTC's 'Other Transaction Authority' (OTA) is granted 'Notwithstanding the Office of Federal Procurement Policy Act of 1974 and the Competition in Contracting Act'.
Section 2, amending Section 18(c)(1) of the Commodity Exchange Act
Why it matters:This is standard legislative practice for granting exemptions from existing laws. It clearly defines the scope of the new authority by specifying which prior statutes it overrides.
Case for: Supporters argue that explicitly overriding these acts is necessary to achieve the desired flexibility and speed for R&D in rapidly evolving tech sectors, as traditional procurement laws are too cumbersome for such engagements.
Case against: Critics might argue that this explicit bypass of fundamental procurement laws significantly reduces transparency and competition, potentially leading to less efficient use of public funds or increased risk of favoritism, even with other safeguards in place.
Estimated impact: Enables the CFTC to engage in R&D partnerships with a wider range of entities, potentially accelerating technological understanding but altering traditional oversight mechanisms.
This clause establishes a sunset date for the authority to accept non-monetary contributions, stating that it 'may not be exercised on or after October 1, 2031'.
Section 2, amending Section 18(d)(5) of the Commodity Exchange Act
Why it matters:This is a common legislative tactic to allow for a trial period for new or potentially controversial authorities. It signals a willingness to review the effectiveness and impact of the authority before making it permanent.
Case for: Supporters would argue that the sunset clause demonstrates a commitment to responsible governance, allowing Congress to assess the benefits and risks of accepting non-monetary contributions after several years of implementation before deciding on its long-term viability.
Case against: Critics might argue that a sunset clause creates uncertainty for long-term R&D partnerships and could limit the CFTC's ability to plan for sustained engagement with external entities, potentially hindering the very innovation it seeks to foster.
Estimated impact: Limits the duration of the CFTC's ability to accept non-monetary contributions, necessitating a future legislative review for continuation.