SILVER Act
- Sponsor
- Sen. Risch, James E. [R-ID]
- Committees
- Agriculture, Nutrition, and Forestry Committee (primary)
- Last action
- May 21, 2026
Bottom line
The SILVER Act aims to enhance the resilience and accessibility of precious metals markets by mandating geographic diversification and increased competition among storage depositories for physically delivered futures contracts.
What it actually does
This bill, known as the SILVER Act, amends the Commodity Exchange Act to require systemically important derivatives clearing organizations (DCOs) that clear physically delivered precious metals contracts to diversify their storage depositories. It mandates the development of objective and transparent criteria for selecting depositories, requires consideration of geographic diversity and competition, and specifically compels DCOs to approve at least two depositories in each of the four continental U.S. time zones.
Proponents argue
Proponents argue that the bill is essential for reducing systemic risk currently posed by the geographic concentration of precious metals storage, primarily near New York City. They contend that diversifying storage locations will increase market liquidity, lower storage costs for participants, and promote greater market access, thereby strengthening the overall integrity and resilience of the precious metals market.
Opponents contend
Potential opponents might argue that mandating specific geographic requirements could impose significant operational complexities and increased costs on derivatives clearing organizations (DCOs), which could ultimately be passed on to market participants. Concerns could also be raised that such mandates might dilute existing high security standards or that the market should be allowed to evolve naturally without legislative intervention.
The bill is concise and its core provisions are clearly articulated, allowing for a quick and thorough assessment of its primary intent and mechanisms.
Section 3(2)(B), amending Section 5b(c)(2)(F)(iii)(I) of the CEA
Objective and Transparent Criteria for Precious Metals Depositories
This provision requires systemically important derivatives clearing organizations (DCOs) that handle physical delivery of precious metals to create and publish clear, objective criteria for evaluating and selecting storage depositories. It also mandates a formal application process for these depositories to seek selection, ensuring fairness and predictability in the approval process.
Supporters argue
Supporters argue this ensures fairness and predictability in the selection process, fostering a more competitive environment for storage services and reducing potential for arbitrary decisions.
Critics contend
No specific opposition is typically raised against transparency requirements, though some DCOs might express concerns about increased administrative overhead.
Tradeoffs
This provision balances the need for DCO autonomy in risk management with the public interest in fair and open market access for storage providers.
Section 3(2)(B), amending Section 5b(c)(2)(F)(iii)(II) of the CEA
Required Considerations for Depository Selection
When selecting depositories, DCOs must now specifically assess and account for geographic diversity, competition, risk management, storage costs to members, and systemic risk implications. They must also approve new depositories considering the public interest in increased geographic diversity, liquidity, market resiliency, market access, competition, and cost efficiency, while maintaining appropriate security and quality standards.
Section 3(2)(B), amending Section 5b(c)(2)(F)(iii)(III) of the CEA
Time Zone-Based Depository Mandate
This provision mandates that systemically important DCOs must select at least two precious metals depositories in each of the four continental U.S. time zones: Eastern, Central, Mountain, and Pacific. This directly addresses the geographic concentration of storage facilities.
Section 3(3)(C), adding Section 5b(c)(2)(I)(iv) of the CEA
Ensuring System Availability and Resiliency for Physical Settlement
This provision requires DCOs to periodically assess the ease of access for market participants to physically settle any commodity, regardless of its geographic location within the United States. The purpose of this assessment is to ensure overall system availability and resiliency for physical delivery.
Requires systemically important derivatives clearing organizations to publish the conditions for applying to and receiving approval as a metal service provider, such as a precious metals depository.
Section 3(4)(C), inserting new subclause (V) into Section 5b(c)(2)(L)(iii) of the Commodity Exchange Act
Why it matters:This is standard legislative practice for amending existing statutes by inserting new clauses into a list of requirements. It's a technical amendment to an existing regulatory framework rather than an evasive tactic.
Case for: Proponents argue that this ensures greater transparency and fairness in the process by which DCOs approve critical service providers, fostering competition and reducing the potential for arbitrary decisions.
Case against: No significant case against, as transparency is generally seen as beneficial, though DCOs might cite proprietary information concerns if the requirements for published conditions were overly granular.
Estimated impact: Minor administrative impact on DCOs, providing significant clarity for potential metal service providers seeking approval.