370 
or deceptive device or contrivance in 
contravention of such rules and regula-
tions as the Commission may prescribe as 
necessary or appropriate in the public in-
terest or for the protection of investors.’’; 
and 
(3) by adding at the end the fol-
lowing: ‘‘Rules promulgated under sub-
section (b) that prohibit fraud, manipula-
tion, or insider trading (but not rules im-
posing or specifying reporting or record-
keeping requirements, 
procedures, 
or 
standards 
as 
prophylactic 
measures 
against fraud, manipulation, or insider 
trading), and judicial precedents decided 
under subsection (b) and rules promul-
gated thereunder that prohibit fraud, ma-
nipulation, or insider trading, shall apply 
with 
respect 
to 
permitted 
payment 
stablecoin and digital commodity trans-
actions engaged in by a broker or dealer 
or through an alternative trading system 
or, as applicable, a national securities ex-
change to the same extent as they apply 
to securities transactions. Judicial prece-
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371 
dents decided under section 17(a) of the 
Securities Act of 1933 and sections 9, 15, 
16, 20, and 21A of this title, and judicial 
precedents 
decided 
under 
applicable 
rules promulgated under such sections, 
shall 
apply 
to 
permitted 
payment 
stablecoins and digital commodities with 
respect to those circumstances in which 
the permitted payment stablecoins and 
digital commodities are brokered, traded, 
or custodied by a broker or dealer or 
through an alternative trading system or, 
as applicable, a national securities ex-
change to the same extent as they apply 
to securities.’’.’’. 
(b) TREATMENT
OF
PERMITTED
PAYMENT 
STABLECOINS.—Title I of the Securities Ex-
change Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 6 the fol-
lowing: 
‘‘SEC. 6A. TREATMENT OF TRANSACTIONS IN PERMITTED 
PAYMENT STABLECOINS. 
‘‘(a) AUTHORITY TO BROKER, TRADE, AND 
CUSTODY PERMITTED PAYMENT STABLECOINS.— 
Permitted payment stablecoins may be bro-
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372 
kered, traded, or custodied by a broker or 
dealer or through an alternative trading sys-
tem or national securities exchange. 
‘‘(b) COMMISSION JURISDICTION.—The Com-
mission shall only have jurisdiction over a 
transaction 
in 
a 
permitted 
payment 
stablecoin 
with 
respect 
to 
those 
cir-
cumstances in which a permitted payment 
stablecoin is brokered, traded, or custodied— 
‘‘(1) by a broker or dealer; 
‘‘(2) through a national securities ex-
change; or 
‘‘(3) through an alternative trading 
system. 
‘‘(c) LIMITATION.—Subsection (b) shall only 
apply to a transaction described in subsection 
(b) for the purposes of regulating the offer, 
execution, solicitation, or acceptance of a per-
mitted payment stablecoin in those cir-
cumstances in which the permitted payment 
stablecoin is brokered, traded, or custodied— 
‘‘(1) by a broker or dealer; 
‘‘(2) through a national securities ex-
change; or 
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373 
‘‘(3) through an alternative trading 
system.’’. 
SEC. 303. ELIGIBILITY OF ALTERNATIVE TRADING SYS-
TEMS. 
(a) IN GENERAL.—Section 5 of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78e) is 
amended— 
(1) by striking ‘‘It’’ and inserting the 
following: 
‘‘(a) IN GENERAL.—It’’; and 
(2) by adding at the end the fol-
lowing: 
‘‘(b) DIGITAL COMMODITY PROTECTIONS.— 
‘‘(1) IN
GENERAL.—The Commission 
may not preclude a trading platform from 
operating pursuant to a covered exemp-
tion on the basis that the assets traded or 
to be traded on such platform include— 
‘‘(A) digital commodities or per-
mitted payment stablecoins; and 
‘‘(B) securities. 
‘‘(2) COVERED EXEMPTION.—In this sub-
section, the term ‘covered exemption’ 
means an exemption— 
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374 
‘‘(A) 
described 
in 
subsection 
(a)(2); or 
‘‘(B) with respect to any other 
rule of the Commission relating to 
the definition of ‘exchange’.’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.— 
Section 3(a)(2) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c(a)(2)) is amended by 
adding at the end the following: ‘‘An alter-
native trading system primarily facilitating 
the trading of digital commodities, permitted 
payment stablecoins, or both, is not a ‘facility’ 
of an exchange.’’. 
(c) RULE
OF CONSTRUCTION.—Nothing in 
this section, the amendments made by this 
section, or section 304 may be construed to— 
(1) prohibit a national securities ex-
change from owning or operating any 
other type of alternative trading system; 
or 
(2) create a presumption that any 
other type of alternative trading system 
owned or operated by a national securi-
ties exchange is a facility of that ex-
change. 
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375 
SEC. 304. OPERATION OF ALTERNATIVE TRADING SYSTEMS. 
(a) COMMISSION AUTHORITY.—The Securi-
ties and Exchange Commission shall have ju-
risdiction over digital commodity activities 
and transactions engaged in by— 
(1) a registered broker or registered 
dealer exempt from registration with the 
Commodity Futures Trading Commission 
pursuant to section 5k of the Commodity 
Exchange Act; and 
(2) an alternative trading system ex-
empt from registration with the Com-
modity Futures Trading Commission pur-
suant to section 5k of the Commodity Ex-
change Act, including where such alter-
native trading system is operated by a 
national securities exchange or affiliate 
thereof. 
(b) RULEMAKING AUTHORITY.—The Securi-
ties and Exchange Commission shall have au-
thority to issue rules governing any digital 
commodity activities and transactions en-
gaged in by a registered broker or registered 
dealer, or an alternative trading system, in-
cluding where such alternative trading sys-
tem is operated by a national securities ex-
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376 
change or affiliate thereof, that is exempt 
from registration with the Commodity Fu-
tures Trading Commission pursuant to sec-
tion 5k of the Commodity Exchange Act, con-
sistent with this section and what is nec-
essary or appropriate in the public interest or 
for the protection of investors. 
(c) NATIONAL SECURITIES EXCHANGES.—Not 
later than 270 days after the date of the enact-
ment of this Act, the Securities and Exchange 
Commission shall revise the covered regula-
tions to permit a national securities exchange 
or affiliate thereof to operate an alternative 
trading system that permits the trading of 
digital 
commodities, 
permitted 
payment 
stablecoins, or both by registered brokers or 
registered dealers that are exempt from reg-
istration with the Commodity Futures Trad-
ing Commission pursuant section 5k of the 
Commodity Exchange Act, consistent with 
this section and what is necessary or appro-
priate in the public interest or for the protec-
tion of investors. 
(d) REGISTERED BROKERS AND REGISTERED 
DEALERS.—Not later than 270 days after the 
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377 
date of the enactment of this Act, the Securi-
ties and Exchange Commission shall revise 
the covered regulations to permit a registered 
broker or registered dealer that is exempt 
from registration with the Commodity Fu-
tures Trading Commission pursuant to sec-
tion 5k of the Commodity Exchange Act to op-
erate an alternative trading system that per-
mits the trading of digital commodities, per-
mitted payment stablecoins, or both, con-
sistent with this section and what is nec-
essary or appropriate in the public interest or 
for the protection of investors. 
(e) PERMITTED TRADING.— 
(1) IN GENERAL.—An alternative trad-
ing system operated pursuant to this sec-
tion and the regulations promulgated 
hereunder shall be permitted to trade 
upon notice to the Securities and Ex-
change Commission in a manner pre-
scribed by the Securities and Exchange 
Commission any digital commodity that 
has been listed by a digital commodity 
exchange in compliance with section 
5i(c)(3) of the Commodity Exchange Act. 
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378 
(2) 
COMMISSION
AUTHORITY.—Digital 
commodity transactions offered on an al-
ternative trading system operating pur-
suant to this section shall be subject to 
the jurisdiction of the Securities and Ex-
change Commission. The Securities and 
Exchange Commission shall have author-
ity to promulgate rules governing such 
digital commodity transactions of alter-
native trading systems, consistent with 
this section and what is necessary or ap-
propriate in the public interest or for the 
protection of investors. 
(3) SUSPENSION OF TRADING.—The Se-
curities and Exchange Commission may 
suspend the trading of a digital com-
modity by an alternative trading system 
operating pursuant to this section as is 
necessary or appropriate in the public in-
terest and is consistent with the protec-
tion of investors. 
(f) ORDER DISPLAY
AND EXECUTION.—Not 
later than 270 days after the date of the enact-
ment of this Act, the Securities and Exchange 
Commission shall issue and revise rules, as 
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379 
necessary or appropriate in the public inter-
est or for the protection of investors, regard-
ing whether alternative trading systems oper-
ating pursuant to subsections (c) and (d) have 
an obligation to provide the prices and sizes 
of orders displayed to more than one person 
in such alternative trading system of digital 
commodities to self-regulatory organizations 
with members who trade in digital commod-
ities or permitted payment stablecoins. 
(g) PRINCIPLES OF TRADE.—Not later than 
270 days after the date of the enactment of 
this Act, the Securities and Exchange Com-
mission shall issue and revise rules, as nec-
essary or appropriate in the public interest or 
for the protection of investors, to— 
(1) apply the rules and standards pro-
mulgated pursuant to paragraph (2) to 
the appropriate market participants, in-
cluding— 
(A) national securities exchanges 
operating an alternative trading sys-
tem described in subsection (c); and 
(B) registered brokers and reg-
istered dealers operating or sub-
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380 
scribing to an alternative trading sys-
tem described in subsection (d); and 
(2) apply, as appropriate to the mar-
ket participants described in paragraph 
(1) and customers thereof, rules and 
standards to— 
(A) prevent fraudulent and ma-
nipulative acts and practices; 
(B) foster cooperation and coordi-
nation with persons engaged in regu-
lating, settling, processing informa-
tion with respect to, and facilitating 
transactions in digital commodities 
or 
permitted 
payment 
stablecoins 
traded, as applicable, on or by any al-
ternative trading system operating 
pursuant to subsection (c) or (d), or 
any registered broker or registered 
dealer; 
(C) remove impediments to and 
perfect the mechanism of a free and 
open market in digital commodities 
or 
permitted 
payment 
stablecoins 
traded, as applicable, on or by any al-
ternative trading system operating 
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381 
pursuant to subsection (c) or (d), or 
any registered broker or registered 
dealer; 
(D) in general, protect investors 
and the public interest; and 
(E) prohibit any unfair discrimi-
nation between— 
(i) customers; 
(ii) any market participants 
described in subparagraphs (A) 
and (B) of paragraph (1); or 
(iii) issuers of digital commod-
ities. 
(h) 
IMPLEMENTING
ORGANIZATIONS.—The 
Securities and Exchange Commission shall re-
quire any registered national securities asso-
ciation that has as a member a registered 
broker or registered dealer that operates an 
alternative trading system pursuant to sub-
section (d) or otherwise transacts in digital 
commodities 
or 
permitted 
payment 
stablecoins to adopt such rules as may be nec-
essary to further compliance with this sec-
tion, including subsection (g)(2), protect in-
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382 
vestors, maintain fair, orderly, and efficient 
markets, and facilitate capital formation. 
(i) RULE OF CONSTRUCTION.—The enumera-
tion of any category of rules or regulations in 
this section shall not be construed to limit the 
authority of the Securities and Exchange 
Commission to promulgate such rules as may 
be necessary or appropriate to implement this 
section and the purposes of this Act, including 
over— 
(1) system capacity, integrity, and se-
curity; 
(2) examinations, inspections, and in-
vestigations; 
(3) trade reporting; or 
(4) written procedures for the con-
fidential treatment of trading informa-
tion. 
(j) MEMORANDUM
OF
UNDERSTANDING.— 
Consistent with section 5k of the Commodity 
Exchange Act and to carry out this Act, the 
Securities and Exchange Commission shall 
enter into a memorandum of understanding 
with the Commodity Futures Trading Com-
mission to ensure— 
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