Campaign Event Contract Integrity Act
Officially: “Campaign Event Contract Integrity Act” Read the full text
What it does
Read it in plain language
1Short title
This section would let the Act be called the Campaign Event Contract Integrity Act.
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1. Short title This Act may be cited as the Campaign Event Contract Integrity Act .
2Definitions
This section would define the terms used in the Act. A covered campaign-affiliated individual would be any individual who, directly or indirectly, receives compensation from, acts on behalf of, or provides services to a candidate for federal office, an authorized committee of such a candidate, a political committee, a political party committee, a leadership PAC, or any entity or organization substantially engaged in campaign-related activity, including an employee, consultant, advisor, pollster, data analyst, strategist, media consultant, fundraiser, vendor, contractor, volunteer with access to confidential information, or an immediate family member acting on behalf of such a person. A covered platform would be any registered entity, designated contract market, swap execution facility, broker, intermediary, or other platform that facilitates trading in political event contracts. Material nonpublic campaign information would be confidential information not available to the public that a reasonable person would consider important in deciding whether to buy, sell, or trade a political event contract, including internal polling, turnout projections, voter targeting data, fundraising information, campaign advertising strategy, opposition research, internal campaign analytics, unreleased endorsement information, candidate withdrawal or suspension plans, or any other confidential campaign information the Commodity Futures Trading Commission designates by rule. A political event contract would be any agreement, transaction, swap, option, contract, derivative, or event contract that lets a person buy, sell, trade, or otherwise gain financial exposure based on the outcome of a federal election, a primary election, a caucus, the nomination of a candidate, control of Congress, the approval or rejection of legislation, or any other political or governmental event the Commodity Futures Trading Commission designates.
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2. Definitions In this Act: (1) Covered campaign-affiliated individual The term covered campaign-affiliated individual means any individual who, directly or indirectly, receives compensation from, acts on behalf of, or provides services to— (A) a candidate for Federal office; (B) an authorized committee of a candidate for Federal office; (C) a political committee; (D) a political party committee; (E) a leadership PAC; or (F) any entity or organization substantially engaged in campaign-related activity, including any employee, consultant, advisor, pollster, data analyst, strategist, media consultant, fundraiser, vendor, contractor, volunteer with access to confidential information, or any immediate family member acting on behalf of such individual. (2) Covered platform The term covered platform means any registered entity, designated contract market, swap execution facility, broker, intermediary, or other platform that facilitates trading in political event contracts. (3) Material nonpublic campaign information The term material nonpublic campaign information means confidential information unavailable to the general public that a reasonable person would consider important in deciding whether to purchase, sell, or trade a political event contract, including— (A) internal polling; (B) turnout projections; (C) voter targeting data; (D) fundraising information; (E) campaign advertising strategy; (F) opposition research; (G) internal campaign analytics; (H) unreleased endorsement information; (I) candidate withdrawal or suspension plans; or (J) any other confidential campaign information designated by rule of the Commodity Futures Trading Commission. (4) Political event contract The term political event contract means any agreement, transaction, swap, option, contract, derivative, or event contract that allows a person to purchase, sell, trade, or otherwise obtain financial exposure based on the outcome of— (A) a Federal election; (B) a primary election; (C) a caucus; (D) the nomination of a candidate; (E) control of Congress; (F) the approval or rejection of legislation; or (G) any other political or governmental event designated by the Commodity Futures Trading Commission.
3Trading by campaign-affiliated individuals
This section would prohibit a covered campaign-affiliated individual from directly or indirectly purchasing, selling, trading, or otherwise transacting in a political event contract while knowingly in possession of material nonpublic campaign information. It would also prohibit a covered campaign-affiliated individual from communicating, providing, or disclosing material nonpublic campaign information to another person when it is reasonably foreseeable that the information could be used to trade a political event contract. It would further prohibit any person from knowingly trading political event contracts on behalf of, at the direction of, or for the benefit of a covered campaign-affiliated individual for the purpose of evading the Act.
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3. Trading by campaign-affiliated individuals (a) Conduct during campaign affiliation No covered campaign-affiliated individual may, directly or indirectly, purchase, sell, trade, or otherwise transact in a political event contract while knowingly in possession of material nonpublic campaign information. (b) Tipping prohibition No covered campaign-affiliated individual may communicate, provide, or disclose material nonpublic campaign information to another person when it is reasonably foreseeable that such information may be used to trade a political event contract. (c) Evasion prohibition No person may knowingly trade political event contracts on behalf of, at the direction of, or for the benefit of a covered campaign-affiliated individual for the purpose of evading this Act.
4Platform safeguards and compliance requirements
This section would require each covered platform to establish and maintain reasonable policies, procedures, and controls designed to detect and prevent trading prohibited under the Act, identify suspicious trading activity involving campaign-affiliated individuals, monitor concentrated or coordinated trading activity connected to campaigns, political committees, or affiliated entities, keep records sufficient to help detect and investigate violations of the Act, and report suspicious activity to the Commodity Futures Trading Commission as appropriate. It would require a covered platform to require any trader engaging in political event contract trading above thresholds set by the Commodity Futures Trading Commission to disclose whether the trader is employed by, compensated by, or affiliated with a federal campaign, political committee, or political party committee, or possesses access to material nonpublic campaign information. It would require the Commodity Futures Trading Commission to issue rules implementing this section within 180 days after the Act is enacted.
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4. Platform safeguards and compliance requirements (a) In general Each covered platform shall establish and maintain reasonable policies, procedures, and controls reasonably designed to— (1) detect and prevent trading prohibited under this Act; (2) identify suspicious trading activity involving campaign-affiliated individuals; (3) monitor concentrated or coordinated trading activity connected to campaigns, political committees, or affiliated entities; (4) maintain records sufficient to assist in the detection and investigation of violations of this Act; and (5) report suspicious activity to the Commodity Futures Trading Commission, as appropriate. (b) Campaign affiliation disclosure A covered platform shall require any trader engaging in political event contract trading above thresholds established by the Commodity Futures Trading Commission to disclose whether such trader— (1) is employed by, compensated by, or affiliated with a Federal campaign, political committee, or political party committee; or (2) possesses access to material nonpublic campaign information. (c) Rulemaking Not later than 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall promulgate rules implementing this section.
5Enforcement
This section would authorize the Commodity Futures Trading Commission to investigate potential violations of the Act and to bring civil enforcement actions in an appropriate United States district court. It would make any violator subject to a civil penalty of not more than the greater of $250,000 or three times the profit gained or loss avoided from the violation, disgorgement of profits obtained through the prohibited trading activity, and temporary or permanent bans on trading political event contracts. It would also let the Commission refer evidence of willful misconduct, fraud, conspiracy, false statements, or other criminal violations to the Attorney General.
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5. Enforcement (a) Authority The Commodity Futures Trading Commission may investigate potential violations of this Act and bring civil enforcement actions in an appropriate United States district court. (b) Civil penalties Any person who violates this Act shall be subject to— (1) a civil penalty not to exceed the greater of— (A) $250,000; or (B) three times the profit gained or loss avoided as a result of the violation; (2) disgorgement of profits obtained through prohibited trading activity; and (3) temporary or permanent trading bans relating to political event contracts. (c) Referral authority The Commodity Futures Trading Commission may refer evidence of willful misconduct, fraud, conspiracy, false statements, or other criminal violations to the Attorney General.
6Safe harbor
This section would state that nothing in the Act prohibits lawful political analysis based exclusively on publicly available information; journalism, academic research, or public commentary; trading activity by people without access to material nonpublic campaign information; or the lawful operation of political event contracts otherwise permitted under federal law.
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6. Safe harbor Nothing in this Act shall be construed to prohibit— (1) lawful political analysis based exclusively on publicly available information; (2) journalism, academic research, or public commentary; (3) trading activity by persons without access to material nonpublic campaign information; or (4) the lawful operation of political event contracts otherwise permitted under Federal law.
7Rule of construction
This section would state that nothing in the Act alters, limits, expands, or otherwise affects the authority of the Commodity Futures Trading Commission under the Commodity Exchange Act; modifies, supersedes, or preempts any existing federal securities, commodities, campaign finance, fraud, ethics, or anti-corruption laws; prohibits or authorizes the prohibition of political event contracts otherwise permitted under federal law; or limits the authority of any federal agency to investigate, enforce, or prosecute conduct otherwise prohibited under federal law.
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7. Rule of construction Nothing in this Act shall be construed to— (1) alter, limit, expand, or otherwise affect the authority of the Commodity Futures Trading Commission under the Commodity Exchange Act; (2) modify, supersede, or preempt any existing Federal securities, commodities, campaign finance, fraud, ethics, or anti-corruption laws; (3) prohibit or authorize the prohibition of political event contracts otherwise permitted under Federal law; or (4) limit the authority of any Federal agency to investigate, enforce, or prosecute conduct otherwise prohibited under Federal law.
Where it is
In the House.