SILVER Act
- Sponsor
- Rep. Fulcher, Russ [R-ID-1]
- Committees
- Agriculture Committee (primary)
- Last action
- Mar 19, 2026
Bottom line
The SILVER Act seeks to decentralize precious metals storage for futures contracts across the U.S. to mitigate systemic risk and foster market competition.
What it actually does
This bill, known as the SILVER Act, amends the Commodity Exchange Act to mandate that derivatives clearing organizations (DCOs) diversify the geographic location of precious metals depositories used for futures contracts. It requires DCOs to establish objective criteria for selecting depositories, considering factors like competition and risk, and specifically mandates the approval of at least two depositories in each of the four U.S. time zones (Eastern, Central, Mountain, Pacific). The aim is to reduce systemic risk, increase liquidity, and enhance competition in precious metals storage.
Proponents argue
Proponents argue that the current concentration of precious metals storage near New York City creates significant systemic risk vulnerabilities and reduces market liquidity, as highlighted by recent market events. They contend that diversifying storage locations geographically will enhance market resiliency, increase competition among storage providers, reduce costs for market participants, and improve overall market access and confidence without compromising security standards.
Opponents contend
While no direct opposition is stated in the bill, potential opponents might argue that mandating specific geographic distribution could impose undue operational burdens and costs on DCOs and existing depositories, potentially disrupting established, secure supply chains. They might also contend that the current system, despite its concentration, has proven secure and that forced diversification could introduce new, unforeseen risks or inefficiencies.
The bill is short and relatively clear, allowing an informed reader to understand its core provisions quickly.
Section 3(1)
Explicitly Include Geographic Concentration in Risk Assessments
This provision amends the Commodity Exchange Act to require derivatives clearing organizations (DCOs) to specifically consider risks related to the geographic concentration of depositories for precious metals (gold, silver, platinum, palladium) when assessing their overall risk management framework. This ensures DCOs actively evaluate and address vulnerabilities stemming from having too many critical assets in one area.
Supporters argue
Supporters argue this is a crucial first step to formally acknowledge and address a significant systemic vulnerability, ensuring DCOs are legally bound to consider geographic risk in their operations.
Critics contend
No specific opposition is typically raised against explicitly including risk factors in assessments, as it aligns with general regulatory best practices.
Tradeoffs
Balances the need for comprehensive risk assessment with potential administrative burdens on DCOs.
Section 3(2)(B) (adding new clause (iii) to 5b(c)(2)(F))
Mandate Objective and Transparent Depository Selection Criteria
This provision requires DCOs to develop, publish, and use objective and transparent criteria for evaluating and selecting precious metals depositories. It also mandates a formal application process for depositories seeking selection, ensuring fairness and clarity in how new storage facilities can join the network.
Section 3(2)(B) (adding new clause (iii)(II) to 5b(c)(2)(F))
Require Consideration of Geographic Diversity, Competition, and Cost in Depository Selection
When selecting precious metals depositories, DCOs must now specifically assess and account for factors such as geographic diversity, competition, risk management, storage costs to members, and systemic risk. Furthermore, they must approve new depositories with a public interest lens, focusing on increasing geographic diversity, liquidity, market resiliency, market access, competition, and cost efficiency, while maintaining appropriate security and quality standards.
Section 3(2)(B) (adding new clause (iii)(III) to 5b(c)(2)(F))
Mandate Minimum Geographic Distribution of Depositories Across Time Zones
This is a highly specific mandate requiring derivatives clearing organizations to select at least two precious metals depositories in each of the four contiguous U.S. time zones: Eastern, Central, Mountain, and Pacific. This provision directly addresses the geographic concentration issue by enforcing a minimum level of distribution.
Section 3(3)(C)
Periodically Assess Ease of Access for Physical Settlement
This provision requires DCOs to periodically assess how easily market participants can physically settle any commodity, regardless of its geographic location within the United States. The goal is to ensure system availability and resiliency for physical delivery.
Section 3(4)(C) and (5)
Include Metal Service Provider Approval Conditions in DCO Rules and Fair Access
These provisions require DCOs to include the conditions for applying to and receiving approval as a "metal service provider" (such as a precious metals depository) within their published rules. Additionally, the approval process for such providers must be subject to the DCO's existing requirements for fair and open access to their services. This ensures transparency and non-discriminatory practices in the selection of these critical service providers.
Mandates that derivatives clearing organizations (DCOs) must select at least two precious metals depositories in each of the four contiguous U.S. time zones: Eastern, Central, Mountain, and Pacific.
Section 3(2)(B)(III)
Why it matters:This level of detail is standard for legislative mandates but is highly impactful. It's buried in the sense that its full implications (e.g., the operational challenge for DCOs) might not be immediately apparent without careful reading.
Case for: Supporters argue this is the most effective way to guarantee meaningful geographic diversification and prevent DCOs from making only token efforts, thereby ensuring true systemic risk reduction and increased competition.
Case against: Critics might argue this is an overly prescriptive mandate that could force DCOs to approve facilities that are less optimal or secure than existing ones, or that it could be difficult to find suitable depositories in all mandated regions, leading to increased costs or operational challenges.
Estimated impact: Significant operational and strategic impact on DCOs, potentially leading to the establishment or approval of numerous new precious metals depositories across the country.