KalshiEX LLC

Rulebook

Date: January 8, 2019

Version: 1.1
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CHAPTER 1 DEFINITIONS 6

CHAPTER 2 MARKET GOVERNANCE 9

RULE 2.1 OWNERSHIP 9

RULE 2.2 BOARD OF DIRECTORS 10

RULE 2.3 OFFICERS 11

RULE 2.4 RESTRICTIONS ON WHO MAY BE MEMBERS OF THE BOARD, MEMBERS OF

THE DISCIPLINARY PANEL, MEMBERS OF THE APPEALS COMMITTEE, OR TEN

PERCENT OR GREATER OWNERS 11

RULE 2.5 COMMITTEES AND SUBCOMMITTEES 13

RULE 2.6 REGULATORY OVERSIGHT COMMITTEE 13

RULE 2.7 DISCIPLINARY PANEL AND APPEALS COMMITTEE 14

RULE 2.8 EMERGENCY RULES 15

RULE 2.9 VOTING BY INTERESTED BOARD MEMBERS 16

RULE 2.10 INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHERS 17

RULE 2.11 PROHIBITION ON USE OF MATERIAL, NON-PUBLIC INFORMATION 17

RULE 2.12 LIMITATION ON TRADING BY AFFILIATES 18

RULE 2.13 CONSENT TO JURISDICTION 18

RULE 2.14 RECORDKEEPING 18

RULE 2.15 INFORMATION-SHARING AGREEMENTS 19

RULE 2.16 RECORDKEEPING AND REPORTING REQUIREMENTS 19

RULE 2.17 PUBLIC INFORMATION 20

CHAPTER 3 MEMBERSHIP 20

RULE 3.1 MEMBERS - APPLICATIONS, AGREEMENTS, ELIGIBILITY CRITERIA,

CLASSIFICATIONS, AND PRIVILEGES 20

RULE 3.2 MEMBER OBLIGATIONS 22

RULE 3.3 REJECTION OF APPLICANT AND LIMITATIONS OF TRADING PRIVILEGES 23

RULE 3.4 COMMUNICATIONS BETWEEN KALSHI AND MEMBERS 24

RULE 3.5 MEMBER FUNDS MAINTAINED WITH THE COMPANY 24

RULE 3.6 DUES, FEES, AND EXPENSES PAYABLE BY MEMBERS 25

CHAPTER 4 [RESERVED] 25

CHAPTER 5 METHOD FOR MEMBERS TO TRADE CONTRACTS 25

RULE 5.1 PRIOR REVIEW OF THESE RULES AND ACCEPTANCE OF TERMS OF MEMBER

AGREEMENT 25

RULE 5.2 MEMBER ACCESS TO KALSHI 25

RULE 5.3 TRADING CONTRACTS – MEMBERS 26

RULE 5.4 ORDER ENTRY 27

RULE 5.5 HANDLING OF CUSTOMER ORDERS 28

RULE 5.6 DISPUTED ORDERS 28

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RULE 5.7 PRIORITY OF ORDERS 29

RULE 5.8 FILLING ORDERS TO TRADE CONTRACTS 29

RULE 5.9 CANCELLATION OF ORDERS 30

RULE 5.10 TRADE CANCELLATIONS 30

RULE 5.11 VIEWING THE MARKET AND EXECUTED ORDERS 31

RULE 5.12 HOURS FOR TRADING CONTRACTS 31

RULE 5.13 PROHIBITED TRANSACTIONS AND ACTIVITIES 31

RULE 5.14 POSITION LIMITS 33

CHAPTER 6 CLEARING AND SETTLING CONTRACT TRADES, CONTRACTS AT EXPIRATION,

AND MEMBER WITHDRAWAL REQUESTS 34

RULE 6.1 CLEARANCE 34

RULE 6.2 SETTLING CONTRACT TRADES 34

RULE 6.3 SETTLING CONTRACTS AT EXPIRATION 34

RULE 6.4 SETTLING MEMBER WITHDRAWAL REQUESTS 35

CHAPTER 7 ADJUSTMENTS NECESSITATED BY MATERIAL CHANGES IN THE

UNDERLYING AND DISPUTE RESOLUTION 36

RULE 7.1 DISPUTE RESOLUTION 36

RULE 7.2 GOVERNMENT ACTIONS 36

CHAPTER 8 INVESTMENT OF MEMBER ACCOUNT FUNDS 37

RULE 8.1 INVESTMENT OF MEMBER ACCOUNT FUNDS 37

CHAPTER 9 DISCIPLINE AND RULE ENFORCEMENT 37

RULE 9.1 MONITORING THE MARKET 37

RULE 9.2 INVESTIGATIONS, HEARINGS, AND APPEALS 37

RULE 9.3 SETTLEMENT OF INVESTIGATIONS 41

RULE 9.4 NOTICE AND PUBLICATION OF DISCIPLINARY ACTION 41

RULE 9.5 PENALTIES 41

RULE 9.6 SUMMARY SUSPENSION 42

RULE 9.7 REPRESENTATION BY COUNSEL 43

RULE 9.8 REPORTING VIOLATIONS TO THE COMMISSION 43

CHAPTER 10 - ARBITRATION 44

RULE 10.1 GENERAL 44

RULE 10.2 FAIR AND EQUITABLE ARBITRATION PROCEDURES 44

RULE 10.3 WITHDRAWAL OF ARBITRATION CLAIM 45

RULE 10.4 PENALTIES 45

RULE 10.5 ARBITRATION PANEL 46

CHAPTER 11 LIMITATION OF LIABILITY; TIME PERIOD IN WHICH TO BRING ACTIONS;

GOVERNING LAW 46

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RULE 11.1 PROPERTY RIGHTS 46

RULE 11.2 SIGNATURES 48

RULE 11.3 LIMITATION OF LIABILITY 48

CHAPTER 12 COMMISSION REGULATIONS THAT HAVE BEEN ADAPTED TO BE PART OF

THE RULES 49

RULE 12.1 ACTIVITIES OF SELF-REGULATORY ORGANIZATION EMPLOYEES AND

GOVERNING MEMBERS WHO POSSESS MATERIAL, NON-PUBLIC INFORMATION

(ADAPTED FROM COMMISSION REGULATION 1.59) 49

RULE 12.2 SERVICE ON SELF-REGULATORY ORGANIZATION GOVERNING BOARDS OR

COMMITTEES BY PERSONS WITH DISCIPLINARY HISTORIES (ADAPTED FROM

COMMISSION REGULATION 1.63) 50

RULE 12.3 VOTING BY INTERESTED MEMBERS OF SELF-REGULATORY ORGANIZATION

GOVERNING BOARDS AND VARIOUS COMMITTEES (ADAPTED FROM COMMISSION

REGULATION 1.69) 51

CHAPTER 13 TERMS OF CONTRACTS TRADED ON KALSHI 53

RULE 13.1 TERMS THAT ARE UNIFORM ACROSS CONTRACTS 53

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CHAPTER 1 DEFINITIONS

When used in this Rulebook the following terms shall have the respective meanings as follows:

“Affiliate” means, with respect to any Person, any Person who, directly or indirectly, Controls, is

Controlled by, or is under common Control with, such other Person.

“Appeal Committee” means a committee of the Board to consider appeals under Chapter 7.

“Applicable Law” means, with respect to any Person, any statute, law, regulation, rule or ordinance of any

governmental or self-regulatory authority applicable to such Person, including the CEA and CFTC

Regulations, and state regulations where applicable.

“Block Trade” means a privately negotiated transaction in a Contract that meets certain quantity

thresholds and is permitted to be executed off the Platform pursuant to these Rules.

“Board” means the Board of Directors of Kalshi, which manages the Company and is constituted from

time to time in accordance with the Operating Agreement.

“Business Day” means, in a given Contract, any day on which a settlement price is determined.

“CFTC” or “Commission” means the U.S. Commodity Futures Trading Commission or any successor

regulatory body.

“CFTC Regulations” means the rules and regulations promulgated by the CFTC, as amended.

“Commodity Exchange Act” or “CEA” means the Commodity Exchange Act, as amended from time to

time.

“Company” or “Kalshi” means KalshiEX LLC, or any successor thereto.

“Contract” means any contract, agreement, or transaction approved for trading on Kalshi pursuant to these

Rules.

“Contract Market” has the meaning set forth in CFTC Regulation § 1.3(h).

“Contract Specifications” means, with respect to any Contract, the rules or other trading protocols

containing specifications for such Contract, as adopted, amended, supplemented or otherwise modified

from time to time by the Company.

“Derivatives Clearing Organization” has the meaning set forth in Section 1a(15) of the CEA.

“Director” means any member of the Board.

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“Disciplinary Panel” means the panel appointed by the Board at the recommendation of the

Chief Compliance Officer to act in an adjudicative role and fulfill various adjudicative

responsibilities and duties described in Chapter 9.

“Emergency” means the occurrences or circumstances which, in the opinion of the Board, require

immediate action, and which threaten, or may threaten, the fair and orderly trading in, or the settlement or

integrity of, any Contract, including, without limitation, the following:

(1) any circumstance that may materially affect the performance of a Contract, including failure to

clear;

(2) any action taken by any domestic or foreign regulatory, self-regulatory, judicial, arbitral, or

governmental (whether national, state or municipal) or quasi-governmental authority, or any

agency, department, instrumentality, or sub-division thereof; or other Person exercising, or

entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing

authority or power; or any other Contract Market, Derivatives Clearing Organization, board of

trade, or other exchange or trade association (foreign or domestic) that may have a direct impact

on trading on Kalshi or the settlement legality or enforceability of any Contract;

(3) any actual, attempted or threatened corner, squeeze, congestion, manipulative activity or undue

concentration of positions in a Contract;

(4) any circumstance that may have a severe, adverse effect upon the functions and facilities of

Kalshi, including, but not limited to, acts of God, fire, flood or other natural disasters, bomb

threats, acts of terrorism or war, severely inclement weather, or failure or malfunction of all or a

portion of the Kalshi Platform, or other system breakdowns or interruptions such as power,

computer, communication or transportation systems or the Internet;

(5) the bankruptcy or insolvency of any Derivatives Clearing Organization or the imposition of any

injunction or other restraint by any government agency, clearing house, court or arbitrator upon a

Derivatives Clearing Organization which may affect the ability of a Derivatives Clearing

Organization to trade in or perform on a Contract;

(6) any circumstance in which it appears to the Board that a Derivatives Clearing Organization or any

other Person:

(i) has failed to perform on a Contract;

(ii) is insolvent; or

(iii)is in a financial or operational condition or is conducting business such that the Derivatives

Clearing Organization or Person cannot be permitted to continue in business without

jeopardizing the safety of Customer funds, Members, Kalshi or the Derivatives Clearing

Organization;

(7) any circumstance which may have a material impact on the reliability or transparency of the

Underlying related to a Contract; or

(8) any other unusual, unforeseeable or adverse circumstance as determined by the Company.

[REDACTED] means [REDACTED], a registered Derivatives Clearing Organization.

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“Expiration” means the time on the Expiration Date established by these Rules at which a Contract

expires and the Expiration Value of that Contract is determined.

“Expiration Date” means the date established by these Rules on which the Expiration Value of each

Contract is determined.

“Expiration Value” means the rate, level, amount, measure, or other value of the Underlying at

Expiration.

“Government Agency” means any governmental entity (including the United States, a State, or a foreign

government).

“Kalshi” or “Company” means KalshiEX LLC, or any successor thereto.

“Material Relationship” has the meaning attributed to such term in Rule 2.2(g).

“Member” means any Person initiating or executing a transaction on or subject to these Rules, either

directly or indirectly, or any Person who is authorized to access or utilize Kalshi pursuant to the

applicable User ID.

“Member Account” means an account carried by Kalshi’s Derivatives Clearing Organization partner,

[REDACTED], on behalf of a Member.

“Officer” has the meaning attributed to such term in Rule 2.3.

“Order” means either a bid or an offer for a Contract.

“Oversight Panel” means any panel, or any subcommittee thereof, authorized by Kalshi to recommend or

establish policies or procedures with respect to Kalshi’s surveillance, compliance, rule enforcement, or

disciplinary responsibilities.

“Payout Criterion” of a Contract means the Expiration Value or range of Expiration Values that will cause

that Contract to pay a Settlement Value to the holder of a long position or the holder of a short position in

such Contract. The holder of a long or short position in a Contract that receives a Settlement Value is

considered to be “in-the-money” while the holder of either a long or short position in a Contract that does

not receive a Settlement Value is considered to be “out-of-the-money”.

“Person” means a natural person or entity.

“Platform” means the Kalshi electronic trade execution system that is used for trading Contracts,

including any licensed software that is a part thereof from time to time, and any successor electronic

trading system thereto.

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“Position Limit” means the maximum position, net long and net short combined, in a Contract that may

be held or controlled by one Member as prescribed by Kalshi and/or the Commission.

“Public Director” means an individual with the qualifications set forth in Rule 2.2(g).

“Regulatory Agency” means any governmental or self-regulatory authority applicable to Kalshi, including

the CFTC and applicable foreign regulators.

“Regulatory Oversight Committee” means the committee of the Board constituted in accordance

with Rule 2.6.

“Rulebook” or “Rules” means the Kalshi Rulebook, interpretations, orders, resolutions, advisories,

notices, statements of policy, decisions, manuals, and directives of the Company or the Derivatives

Clearing Organization.

“Self-Regulatory Organization” shall, unless otherwise provided, have the meaning set forth in

CFTC Regulation § 1.3(ee) and, in addition, shall include a Contract Market, Derivatives Clearing

Organization, and registered futures association.

“Settlement Date” means the date on which money is paid to the account of a Member who has the right

to receive money pursuant to a Contract held until Expiration, and on which money is paid from the

account of a Member who is obligated to pay money pursuant to a Contract held until Expiration. Unless

otherwise specified in these Rules, the Settlement Date is the same day as the Expiration Date.

“Settlement Value” means the amount which the holder of a Contract may receive for a Contract held

until Expiration.

“Trade” or “Transaction” means any purchase or sale of any Contract on Kalshi, either directly or

indirectly.

“Underlying” means the index, rate, risk, measure, instrument, differential, indicator, value, contingency,

occurrence, or extent of an occurrence the Expiration Value of which determines whether a Contract is

in-the-money.

CHAPTER 2 MARKET GOVERNANCE

RULE 2.1 OWNERSHIP

KalshiEX LLC (“Kalshi” or the “Company”) is a Delaware limited liability company. The management

and operation of Kalshi is governed by the Operating Agreement and the Rules. Member status does not

confer any equity interest or voting rights in the Company.

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RULE 2.2 BOARD OF DIRECTORS

The Board has the power to manage and direct Kalshi including but not limited to the power to define the

standards for membership in Kalshi and the power to amend, adopt, or repeal these Rules, and the power

to oversee the business conduct of Members and impose penalties for violation of these Rules.

(a) The Board shall manage the day to day business operations of the Company. The Board has the power

and authority to call for review, and to affirm, modify, suspend or overrule, any and all decisions and

actions of standing committees or special committees of the Board or any panel of the Officers related

to the day to day business operations of the Company.

(b) The chief executive officer of Kalshi shall serve as chairman of the Board.

(c) Any authority or discretion by the Rules vested in any Officer or delegated to any committee or

subcommittee shall not be construed to deprive the Board of such authority or discretion and, in the

event of a conflict, the determination of the matter by the Board shall prevail.

(d) A majority of the Directors serving on the Board, including at least one Public Director, shall

constitute a quorum for the transaction of business of the Board. At all times when the Board is

conducting business at a meeting of the Board, a quorum of the Board must be present at such

meeting, and the Board may act only by the decision of a majority of the Directors constituting a

quorum of the Board by vote at a meeting, by unanimous written consent without a meeting, or as

otherwise set forth in the Operating Agreement.

(e) The Board shall comprise the number of Directors set forth in the Operating Agreement and shall

include Public Directors as no less than 35% of the Board, at all times. Each Director (including

Public Directors) shall be appointed in accordance with the Operating Agreement and shall serve until

his or her successor is duly appointed, or until his or her earlier resignation or removal, with or

without cause.

(f) Each Director is entitled to indemnification pursuant to the Operating Agreement with respect to

matters relating to the Company.

(g) To qualify as a Public Director, an individual must be found, by the Board and on the record, to have

no Material Relationship, as defined below, with the Company. The Board must make such a finding

at the time the Public Director is elected and as often as necessary in light of all circumstances

relevant to such Public Director, but in no case less than annually. A Material Relationship is one that

reasonably could affect the independent judgment or decision-making of the Director. The Board

need not consider previous service as a Director of the Company to constitute a Material Relationship.

A Director shall be considered to have a Material Relationship with the Company if any of the

following circumstances exist or have existed within the past year:

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(1) Such Director is or was an Officer or an employee of the Company, or an officer or an employee

of an Affiliate of the Company; or

(2) Such Director is or was a Member.

(h) If any immediate family of a Director are found to have a Material Relationship, then such Material

Relationship will be determined to apply to the Director.

(i) The Board shall have procedures, as may be adopted by the Board from time to time, to remove a

Director where the conduct of such Director is likely to be prejudicial to the sound and prudent

management of the Company.

(j) The Board shall review its performance and that of its individual directors annually.

RULE 2.3 OFFICERS

(a) The Board shall appoint a Chief Executive Officer, Chief Operating Officer, Chief Compliance

Officer, and other such officers of Kalshi as it may deem necessary or appropriate from time to time

(collectively, the “Officers”).

(b) Any Officer may also be a director, officer, partner or employee of the Company or of any of its

Affiliates, subject to disclosure and resolution of conflicts of interest.

(c) The Officers shall have such powers and duties in the management of the Company as the Board may

prescribe from time to time, subject to any limitations set forth in the Operating Agreement.

(d) Each Officer is entitled to indemnification pursuant to the Operating Agreement with respect to

matters relating to the Company.

RULE 2.4 RESTRICTIONS ON WHO MAY BE MEMBERS OF THE BOARD,

MEMBERS OF THE DISCIPLINARY PANEL, MEMBERS OF THE APPEALS

COMMITTEE, OR TEN PERCENT OR GREATER OWNERS

(a) An individual may not serve as a Director or Officer, serve on a committee or subcommittee

established by the Board, or hold a 10% or greater ownership interest in the Company, if the

individual:

(1) Within the prior three years has been found, by a final decision of a court of competent

jurisdiction, an administrative law judge, the CFTC, or any Self-Regulatory Organization, to have

committed a disciplinary offense;

(2) Within the prior three years has entered into a settlement agreement in which any of the findings

or, in the absence of such findings, any of the acts charged included a disciplinary offense;

(3) Is currently suspended from trading on a Designated Contract Market or a Swap Execution

Facility, is suspended or expelled from membership in a Self-Regulatory Organization, is serving

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any sentence of probation, or owes any portion of a fine or penalty imposed pursuant to either: a

finding by final decision of a court of competent jurisdiction, an administrative law judge, the

CFTC or any Self-Regulatory Organization that such person committed a disciplinary offense; or

a settlement agreement in which any of the findings or, in the absence of such findings, any of the

acts charged included a disciplinary offense;

(4) Is currently subject to an agreement with the CFTC or Self-Regulatory Organization not to apply

for registration with the CFTC or for membership in the Self-Regulatory Organization;

(5) Is currently, or within the past three years has been, subject to a revocation or suspension of

registration by the CFTC, or has been convicted within the past three years of any of the felonies

listed in Section 8a(2)(D)(ii) through (iv) of the CEA;

(6) Is currently subject to a denial, suspension or disqualification from serving on a disciplinary

panel, arbitration panel or governing board of any self-regulatory organization as that term is

defined in Section 3(a)(26) of the Securities Exchange Act of 1934; or

(7) Is subject to a statutory disqualification pursuant to Section 8a(2) of the CEA.

For purposes of this Rule 2.4(a), the terms “disciplinary offense,” “final decision” and “settlement

agreement” have the meaning given those terms in CFTC Regulation 1.63(a).

(b) Any Director, Officer, member of a committee established by the Board and any individual

nominated to serve in any such role, shall immediately notify the Chief Executive Officer if such

individual is subject to one or more of the criteria in Rule 2.4(a). Prior to nomination to the Board,

each individual shall certify that he or she is not disqualified pursuant to Rule 2.4(a). Upon

appointment, each Director, Officer, and a member of a committee shall provide to the Company,

where applicable, changes in registration information within 30 days and certification of compliance

accordingly. The Company shall verify information supporting Board compliance with eligibility

criteria.

(c) To serve as a Director, an individual must possess the ability to contribute to the effective oversight

and management of the Company, taking into account the needs of the Company and such factors as

the individual’s experience, perspective, skills and knowledge of the industry in which the Company

operates.

(d) A Director or Officer must meet any qualifications set forth from time to time in the Operating

Agreement and these Rules.

(e) An individual may not serve on any Disciplinary Panel, arbitration panel, or the Appeals Committee

during any proceeding affecting or concerning such individual, to be determined in a reasonable

manner by the Company.

(f) If the Company determines that an individual subject to this Rule 2.4 no longer meets the criteria set

forth in Rule 2.4(a), the Company shall inform the CFTC of such determination. The Company shall

provide to the CFTC, upon request, an individual’s certification of compliance with the criteria set

forth in Rule 2.4(a).

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RULE 2.5 COMMITTEES AND SUBCOMMITTEES

(a) The Board may create, appoint Directors to serve on, and delegate powers to, committees and

subcommittees. There shall be a Regulatory Oversight Committee, Disciplinary Panel, and Appeals

Committee. The Board shall designate the chairperson of each such committee.

(b) Each committee and subcommittee shall assist in the supervision, management and control of the

affairs of the Company within its particular area of responsibility, subject to the authority of the

Board.

(c) Subject to the authority of the Board, each committee and subcommittee shall determine the manner

and form in which its proceedings shall be conducted. A majority of the members serving on a

committee or subcommittee, including at least one Public Director, shall constitute a quorum for the

transaction of business of a committee or subcommittee. Each committee and subcommittee may act

only by the decision of a quorum, by vote at a meeting or by unanimous written consent without a

meeting. The Board has the authority to overrule the decisions of any committee or subcommittee.

RULE 2.6 REGULATORY OVERSIGHT COMMITTEE

(a) The Regulatory Oversight Committee shall be a standing committee of the Board consisting of only

Public Directors, as appointed from time to time. No less than two Public Directors shall serve on the

Regulatory Oversight Committee.

(b) Each member of the Regulatory Oversight Committee shall serve for a term of one calendar year from

the date of his or her appointment or for the remainder of his or her term as a Public Director, and

until the due appointment of his or her successor, or until his or her earlier resignation or removal,

with or without cause, as a member of the Regulatory Oversight Committee or as a Public Director. A

member of the Regulatory Oversight Committee may serve multiple terms.

(c) The Regulatory Oversight Committee shall oversee the Company’s regulatory program on behalf of

the Board. The Board shall delegate sufficient authority, dedicate sufficient resources, and allow

sufficient time for the Regulatory Oversight Committee to fulfill its mandate. The Regulatory

Oversight Committee shall make such recommendations to the Board that will, in its judgment, best

promote the interests of the Company. The Regulatory Oversight Committee shall also have such

other powers and perform such other duties as set forth in the Rules and as the Board may delegate to

it from time to time.

(d) The Regulatory Oversight Committee shall appoint individuals to the Disciplinary Panel in

accordance with these Rules, Applicable Law and the composition requirements of the Disciplinary

Panel. The Committee shall appoint at least one person who would not be disqualified from serving as

a Public Director.

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(e) The Regulatory Oversight Committee shall prepare an annual report that assesses the Company’s

self-regulatory program for the Board and the CFTC. The annual report sets forth the regulatory

program’s expenses, describes its staffing and structure, catalogues disciplinary actions taken during

the year, and reviews the performance of the Disciplinary Panel. Such report may be prepared in

conjunction with the Chief Compliance Officer’s annual compliance report as required pursuant to

CFTC Regulation 39.10(c)(3).

(f) Without limiting the generality of the foregoing, the Regulatory Oversight Committee shall have the

authority to:

(1) Monitor the regulatory program of the Company for sufficiency, effectiveness, and independence;

(2) Oversee all facets of the regulatory program, including trade practice and market surveillance;

audits, examinations, and other regulatory responsibilities with respect to Members (including

ensuring compliance with financial integrity, financial reporting, sales practice, recordkeeping,

and other requirements); and the conduct of investigations;

(3) Review the size and allocation of the regulatory budget and resources; and the number, hiring,

termination, and compensation of regulatory personnel;

(4) Supervise the Chief Compliance Officer of the Company, who will report directly to the

Regulatory Oversight Committee, the Board and Chief Executive Officer;

(5) Recommend changes that would ensure fair, vigorous, and effective regulation; and

(6) Review all regulatory proposals prior to implementation and advise the Board as to whether and

how such changes may impact regulation.

RULE 2.7 DISCIPLINARY PANEL AND APPEALS COMMITTEE

(a) The Disciplinary Panel shall be:

(1) A standing committee consisting of at least three members, including at least one person who

would not be disqualified from serving as a Public Director. At least one member of the

Disciplinary Panel must be a Member. The Board may establish more than one Disciplinary

Panel. The Regulatory Oversight Committee will appoint individuals for membership on the

Disciplinary Panel. Each Disciplinary Panel shall include members with sufficient differing

experience and Member interests so as to ensure fairness and to prevent special treatment or

preference for any Person.

(2) Responsible for conducting hearings, rendering decisions, and imposing sanctions with respect to

any Disciplinary Action. The Disciplinary Panel shall also have such other powers and perform

such other duties as set forth in the Rules and as the Board may determine from time to time.

(b) Each member of the Disciplinary Panel shall serve for a term of one calendar year from the date of his

or her appointment, and until the due appointment of his or her successor, or until his or her earlier

resignation or removal, with or without cause, as a member of the Disciplinary Panel. A member of

the Disciplinary Panel may serve for multiple terms.

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(c) The Appeals Committee shall be:

(1) A standing committee consisting of at least three members of the Board. The members of the

Appeals Committee and its Chairperson shall be appointed by the Chairperson of the Board,

provided that, at all times the Appeals Committee shall include at least one Public Director.

(2) Responsible for conducting hearings of appeals of decisions of the Disciplinary Panel, rendering

decisions of such appeals, and imposing sanctions with respect to such appeals; and for the

review, and rendering decisions for disputes related to contract settlement. The Appeals

Committee shall also have such other powers and perform such other duties as set forth in these

Rules and as the Board may determine from time to time.

(d) Each member of the Appeals Committee shall serve for a term of one calendar year from the date of

his or her appointment or for the remainder of his or her term as a Public Director, as applicable, and

until the due appointment of his or her successor, or until his or her earlier resignation or removal,

with or without cause, as a member of the Appeals Committee or as a Public Director. A member of

the Appeals Committee may serve multiple terms.

RULE 2.8 EMERGENCY RULES

(a) Kalshi may adopt emergency Rules in response to the emergencies that are described in paragraph (c)

of this Rule. In the event of one of those emergencies, the Board or at least two members of the

Management Team may, without giving prior notice to, or securing prior approval from the

Commission, adopt a temporary emergency rule to address the emergency. Adoption of a temporary

emergency rule requires the CEO’s approval. Adoption of a temporary emergency rule by the

management team requires the written authorization and acknowledgement of two members of the

management team, indicating the emergency action to be taken and the reasons for that action, before

the action is taken.

(b) Any temporary emergency rule adopted under this Rule may authorize Kalshi to act as the Board or

management team deems necessary or appropriate to meet the emergency, and those actions may

adversely affect the ability to trade on the Platform. Therefore, the chance of an emergency is one of

the risks that Members should consider when deciding whether to trade on the Platform.

(c) For the purposes of this Rule, an “emergency” is

(1) Any activity that manipulates or attempts to manipulate a Contract on the Platform;

(2) Any circumstance that may materially affect the performance of the Contracts traded on Kalshi;

(3) Any action taken by the United States, any foreign government, any state or local governmental

body, any other contract market or board of trade, or any other exchange, market, facility, or trade

association (foreign or domestic) that may have a direct impact on trading on Kalshi;

(4) Any circumstances that may have a severe, adverse impact upon the physical functions of Kalshi

including, for example, natural disasters such as fire or flood, terrorist acts such as bomb threats,

physical plant breakdowns such as plumbing, heating, or air conditioning problems, system

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breakdowns such as power, telephony, cable, trading systems, or computer systems failures or

interruptions to communications, the network, or the Internet;

(5) The imposition of any injunction or other restraint by any government agency, court, or arbitrator

that may affect the ability of a Member to perform on Contracts;

(6) Any circumstance in which it appears that a Kalshi Member or any other person is in such

operational condition, or is conducting business in such a manner, that such person cannot be

permitted to continue in business without jeopardizing the safety of Kalshi Members or Kalshi

itself; and

(7) Any other unusual, unforeseeable, and adverse circumstance which, in the opinion of the

governing board, requires immediate action and threatens or may threaten such things as the fair

and orderly trading in, or the liquidation of or delivery pursuant to Contracts traded on Kalshi.

(d) If deemed necessary to combat perceived market threats caused by an emergency, a Kalshi official

authorized to do so may suspend trading on the Platform during the duration of the emergency or take

any other action that the official thinks is necessary or appropriate. The official will order an end to

the action taken in response to the emergency as soon as the official determines that the emergency

has sufficiently abated to permit the Platform to function properly.

(e) Kalshi will make every effort practicable to notify the Director of the Division of Market Oversight,

his delegates, and/or other persons designated by the Commission’s Regulations that Kalshi intends to

implement, modify, or terminate a temporary emergency rule pursuant to Rule 2.4(a) or an action in

response to an emergency pursuant to Rule 2.4(d) prior to the implementation, modification, or

termination of the rule or action. If it is not possible to notify the Commission prior to the

implementation, modification, or termination of the rule or action, Kalshi will notify the Commission

of the implementation, modification, or termination of the rule or action at the earliest possible time,

and in no event more than 24 hours after implementation, modification, or termination.

(f) Any time that Kalshi takes action in response to an emergency, either under Rule 2.4(a) or Rule

2.4(d), Kalshi will document its decision-making process and reasons for taking emergency action.

RULE 2.9 VOTING BY INTERESTED BOARD MEMBERS

Core Principle 16 of Section 5(d) of the Commodity Exchange Act (“CEA”) requires that contract

markets have adequate procedures to prevent conflicts of interest. In this regard, Kalshi has adopted

provisions of Commission Regulation 1.69 as Rules provided herein. Commission Regulation 1.69

prohibits a member of the Board or any disciplinary or oversight committee or subcommittee from taking

part in any deliberations or voting on any matter in which the board, committee, or subcommittee member

has an interest or has a relationship with a named party in interest. Regulation 1.69 also requires

disclosure by Board, committee, or subcommittee members of interests and relationships in certain

circumstances. Consequently, Board, committee, and subcommittee members shall not deliberate or vote

on any matter in which the Board, committee, or subcommittee member has an interest or has a

relationship with a named party in interest and shall disclose such interests in accordance with Regulation

1.69.

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RULE 2.10 INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHERS

(a) Kalshi will indemnify, to the full extent authorized by law, any person who was or is a party or is

threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding,

whether civil, criminal, administrative, or investigative in nature, by reason of the fact that such

person is or was a director, officer, employee, or agent of Kalshi or is or was serving at the request of

Kalshi as a director, officer, employee, or agent of Kalshi against expenses, including attorneys’ fees,

judgments, fines, and amounts paid in connection with such action, suit, or proceeding.

(b) Indemnification shall not be deemed exclusive of any other rights to which a person may be entitled

under any agreement or as a matter of law or otherwise.

(c) Kalshi may purchase and maintain insurance on behalf of any person who is or was a director, officer,

employee, or agent of Kalshi against any liability asserted against such person and incurred by such

person in any such capacity, or arising out of such person’s status as such, whether or not Kalshi

would have the power to indemnify such person against such liability under the provisions of this

Rule.

(d) Notwithstanding the above, no person shall be indemnified from liability for fraud, bad faith, willful

misconduct, or gross negligence. Further, no person shall be indemnified against a civil penalty

imposed by the Commission under Section 6b of the CEA.

RULE 2.11 PROHIBITION ON USE OF MATERIAL, NON-PUBLIC INFORMATION

(a) Commission Regulation 1.59 prohibits employees and members of the Board from using or disclosing

material, nonpublic information gained through their employment or board service in certain

circumstances. This Rule prohibits the use and disclosure forbidden by Commission Regulation 1.59.

In this regard, Kalshi has adopted provisions of Regulation 1.59 as a Rule of Kalshi in Chapter 11 of

these Rules.

(b) No member of the Board or any committee established by the Board or these Rules will use or

disclose material, nonpublic information obtained as a result of participation on the Board or such

committee for any purpose other than the performance of official duties as a board or committee

member.

(c) No employee, consultant, or member of the Board or any committee of Kalshi will disclose to any

other person material, nonpublic information obtained as a result of such person’s employment for

purposes inconsistent with such person’s official duties.

(d) No employee, consultant, or member of the Board or any committee of Kalshi will trade for such

person’s account, or for or on behalf of any other account, in any commodity interest on the basis of

any material, non-public information obtained through special access related to the performance of

17
such person’s duties as an employee, consultant, or member of the Board or committee.

(e) No Member who inadvertently or otherwise comes into possession of any material, non-public

information held by Kalshi or any employee, consultant, or member of the Board or any committee of

Kalshi gained through their employment by or service to Kalshi will disclose to anyone such material,

non-public information or trade for such person’s account, or for or on behalf of any other account, in

any commodity interest on the basis of such material, nonpublic information.

(f) For purposes of this Rule, the terms “material information,” “nonpublic information,” “linked

exchange”, “commodity interest,” and “related commodity interest” have the same meanings as they

do in Commission Regulation 1.59.

(g) Any director, officer, or employee of Kalshi who violates any provision of this Rule will be required

to indemnify Kalshi for any losses, damages, or costs caused by that violation.

RULE 2.12 LIMITATION ON TRADING BY AFFILIATES

The Company, pursuant to approval by the Board, may permit certain of its affiliates to participate on its

Platform subject to the following provisions:

(a) Any such affiliates shall be limited to public information which Kalshi makes available to Members

and must maintain operational impartiality from the Company.

(b) All funds invested by an affiliate must originate from a separate legal entity with independent capital.

(c) Any algorithms employed by the affiliates must not be readily exploitable.

RULE 2.13 CONSENT TO JURISDICTION

Any Person initiating or executing a transaction subject to these Rules, directly or indirectly, and any

Person for whose benefit such a transaction has been initiated or executed, expressly consents to the

jurisdiction of Kalshi and agrees to be bound by and comply with the Rules of the Company in relation to

such transactions, including, but not limited to, Rules requiring cooperation and participation in

investigatory and disciplinary processes.

RULE 2.14 RECORDKEEPING

(a) Kalshi shall keep, or cause to be kept, complete and accurate books and records of accounts and

activities of the Company, including all books, records and other documentation required to be

maintained pursuant to the CEA and CFTC Regulations.

(b) Kalshi shall retain all such books and records in accordance with the CEA and CFTC Regulations.

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(c) Kalshi will provide information required to be maintained or provided pursuant to the CEA and

CFTC Regulations to the Commission, the U.S. Securities and Exchange Commission, the U.S.

Department of Justice or any representative of a prudential regulator as authorized by the

Commission, upon request, in each case in the form and manner required under these Rules, and/or

the CEA and CFTC Regulations.

RULE 2.15 INFORMATION-SHARING AGREEMENTS

(a) Kalshi may enter into any information-sharing agreements or other arrangements or procedures,

including an information-sharing agreement or other arrangement or procedure with any Person or

body (including but not limited to a Regulatory Agency) if the Company considers such agreement,

arrangement or procedures to be in furtherance of the Company’s purpose or duties under these Rules

or Applicable Law.

(b) Kalshi may provide information to a duly authorized foreign governmental authority, as directed by

the CFTC, in accordance with an information-sharing agreement or other arrangements or procedures

executed with such foreign governmental authority or the CFTC.

RULE 2.16 RECORDKEEPING AND REPORTING REQUIREMENTS

(a) In the event the Board rejects a recommendation or supersedes an action of the Regulatory Oversight

Committee or the Chief Compliance Officer, Kalshi shall maintain documentation detailing:

(1) The recommendation or action of the Regulatory Oversight Committee or the Chief Compliance

Officer as the case may be;

(2) The rationale for such recommendation or action;

(3) The rationale of the Board for rejecting such recommendation or superseding such action; and

(4) The course of action that the Board decided to take contrary to such recommendation or action.

(b) Kalshi shall record and report to the CFTC all data required to be reported to the CFTC under Part 16

of CFTC Regulations, in the form and manner required by CFTC Regulations.

(c) Kalshi shall keep and maintain books and records identifying each Order submitted to the Company

and each Transaction effected pursuant to these Rules, including the identification of the execution

method (e.g., central limit order book) with respect to each such Order and Transaction. These books

and records shall be kept and maintained in accordance with the CEA and CFTC Regulations.

(d) Kalshi shall submit to the CFTC within thirty days after each Board election a list of the Board’s

Directors, the Member interests they represent, and how the composition of the Board meets the

requirements of CFTC Regulation 1.64(b) and the Company’s Rules and procedures.

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RULE 2.17 PUBLIC INFORMATION

(a) Accurate, complete and current copies of these Rules and Contract Specifications will be published

on the Company website.

(b) Kalshi shall make public on a daily basis information on settlement prices, volume, open interest, and

opening and closing ranges for actively traded Contracts.

(c) Except as provided herein, Kalshi shall publish on its Website a Member Notice with respect to each

addition to, modification of, or clarification of, the Rules, the Matching Engine, and any Company

Contract Specification prior to the earlier of:

(1) The effective date thereof; and

(2) The filing of such change with the Commission.

(d) If confidential treatment is sought with respect to any information the Company submits to a

Regulatory Agency, only the public version of such filing shall be disclosed.

(e) Any Member Notice shall be deemed to have been made to all Members and any other such Person as

may be required by sending such Member Notice to the email address on file with the Company and

by posting the Member Notice on the Company website.

CHAPTER 3 MEMBERSHIP

RULE 3.1 MEMBERS - APPLICATIONS, AGREEMENTS, ELIGIBILITY CRITERIA,

CLASSIFICATIONS, AND PRIVILEGES

Kalshi will provide access to the Platform (including but not limited to the central limit order book) and

related services in an impartial, transparent, fair and non-discriminatory manner.

(a) To be eligible to become a Member, an applicant must:

(1) Be a Person;

(2) Provide Kalshi with any information or documentation Kalshi deems necessary in order to verify

the applicant’s identity, perform a criminal background check, or otherwise review information

provided on an application or by a third-party provider;

(3) Maintain an account, or accounts, in the Member’s name with a U.S. Financial Institution that the

Member will use to fund its Kalshi account at the Derivatives Clearing Organization, and to

receive funds from its Kalshi account, or, if the Member is a non-United States resident, have an

account or accounts in the Member’s name with either a US Financial Institution or a Foreign

Bank capable of transacting with the Derivatives Clearing Organization either directly, through a

correspondent account, or other acceptable intermediary that the Member will use to fund its

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Kalshi account at the Derivatives Clearing Organization, and to receive funds from its Kalshi

account via one of the acceptable methods as stated on the Kalshi website;

(4) Not be subject to any economic or trade sanctions programs administered by OFAC or other

relevant U.S. or non-U.S. authority; and must not be listed on OFAC’s List of Specially

Designated Nationals and Blocked Persons; and

(5) Certify the following:

(i) The applicant is old enough to enter into a legally enforceable contract and has reached the

required age as stated on the Member Agreement;

(ii) The applicant has read, understands and agrees to comply with the Kalshi Rulebook, Terms

of Use, Privacy Policy, and Member Agreement;

(iii) The applicant will trade only for itself and will not serve as an intermediary for any other

Person.

(b) In order to become a Member, an applicant must complete an online member application (the

“Member Application”) and provide Kalshi with any other relevant information upon request. Kalshi

may return any account balance and terminate any account upon the discovery that the Member

Application was completed by anyone other than the Person identified on the Member Application.

All funds deposited by Members shall constitute “Member Property” in accordance with CFTC

Regulations.

(c) Submission of a Member Application to Kalshi constitutes the applicant’s agreement to be bound by

these Rules and other policies of Kalshi.

(d) If an application is approved by Kalshi, the applicant will be a Member and will have the following

privileges, which Kalshi may revoke, amend, or expand in accordance with, or by amending, these

Rules:

(1) To maintain a Kalshi account;

(2) To buy Contracts on the Platform using the funds in its Kalshi account;

(3) To sell Contracts on the Platform using the funds in its Kalshi account;

(4) To view “real-time” the same best bids to buy and offers to sell the Contracts traded on the

Platform as are available to all other Members;

(5) To view the current trading volume and open interest for the Contracts traded on the Platform;

and

(6) To view all non-secure parts of the Kalshi website, including these Rules, and descriptions of

Contracts traded on the Platform as well as all secure parts of the Kalshi website outlined above

in Rule 3.1(d)(1)-(5).

(e) Kalshi may in its sole discretion approve, deny, or condition any Member application as Kalshi deems

necessary or appropriate.

(1) In the event that Company staff decides to decline or condition an application for admission as a

Member, or to terminate a Person’s status as Member, Company staff shall notify such Person

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thereof in a written notice sent to the address provided by the Person in the Member Application

and Agreement or maintained in the Company’s registry of Members. The written notice will

specify the basis for the Company’s decision. Such Person may, within 28 Business Days, request

in writing that the Company reconsider the determination.

(2) Within 28 Business Days of receiving a request for reconsideration, the Company shall confirm,

reverse or modify the denial, condition or terminate the Member status of such Person, and shall

promptly notify such Person accordingly in writing. The Company may, in its sole discretion,

schedule a hearing (in person or by teleconference), request additional information from such

Person or establish any other process that it believes is necessary or appropriate to consider the

request for reconsideration.

(3) The Company’s decision is the final action of the Company and is not subject to appeal.

(f) A Member may not maintain and/or trade more than one Kalshi account.

(g) Applicants for Member status of the Company may withdraw their applications at any time without

prejudice or without losing their right to apply at a future time.

(h) Kalshi will apply Member access criteria in a fair and nondiscriminatory manner that is not

anti-competitive.

RULE 3.2 MEMBER OBLIGATIONS

(a) Each Member must comply with these Rules, applicable provisions of the Commodity Exchange Act,

and relevant Commission regulations. Each Member must also cooperate promptly and fully with

Kalshi, its agents, and/or the Commission in any investigation, call for information, inquiry, audit,

examination, or proceeding. Such cooperation shall include providing Kalshi with access to

information on the activities of such Member in any referenced market that provides the underlying

prices for any Contract. Additionally, each Member must update its e-mail address within 24 hours

after any change and update all other information provided in its Member Application within five

days after that information has changed. If any Member thereof fail to satisfy these obligations,

Kalshi may revoke or suspend the Member’s privileges in full or in part. Each Member may also be

subject to civil or criminal prosecution.

(b) Each Member consents to allow Kalshi to provide all information Kalshi has about the Member,

including the Member’s trading activity, to the Commission or any other Regulatory Agency, law

enforcement authority, or judicial tribunal, including (as may be required by information sharing

agreements or other contractual, regulatory, or legal provisions) foreign regulatory or self-regulatory

bodies, law enforcement authorities, or judicial tribunals without notice to the Member.

(c) Each Member consents to Kalshi providing information related to Know Your Customer or

Anti-Money Laundering to its Derivatives Clearing Organization, [REDACTED].

22
(d) Each Member is required to review the “Notices” section of the Kalshi website to make itself aware

of material changes to these Rules or other notices that may affect your rights and obligations as a

Member of Kalshi.

(e) Each Member must immediately notify Kalshi in writing upon becoming aware:

(1) That the Member has had access or trading privileges suspended, or membership denied, in any

commodity, securities, or swaps exchange, brokerage, association, or Regulatory Agency;

(2) That the Member has been convicted of, pled guilty or no contest to, or entered a plea agreement

to, any felony in any domestic, foreign or military court;

(3) That the Member has been convicted of, plead guilty or no contest to, or entered a plea agreement

to a misdemeanor in any domestic, foreign or military court which involves:

(i) Embezzlement, theft, extortion, fraud, fraudulent conversion, forgery, tax evasion,

counterfeiting, false pretenses, bribery, gambling, racketeering, or misappropriation of

funds, securities or properties; or

(ii) Any transaction in or advice concerning swaps, futures, options on futures, leveraged

transactions or securities;

(4) that the Member has been subject to, or associated with a firm that was subject to regulatory

proceedings before any governmental or Regulatory Agency;

(5) That the Member is currently a party to any investigation or proceeding, the resolution of which

could result in an event described in Rule 3.3(d)(1)-(4);

(6) Of any other material change in any information contained in the Member Application;

(7) Of becoming subject to early warning reporting under Commission Regulation 1.12;

(8) Of becoming the subject of a bankruptcy petition, receivership proceeding, or the equivalent, or

being unable to meet any financial obligation as it becomes due; or

(9) Of information that concerns any financial or business developments that may materially affect

the Members’ ability to continue to comply with participation requirements.

(f) A Member is not required to engage in trading activity or maintain a minimum balance in its account

after initial funding.

(g) Each Member, upon a request of the Company or any Regulatory Agency, must promptly respond to

any requests for information, including by providing any necessary information for the Company to

perform any of the functions described in CEA Section 5h.

RULE 3.3 REJECTION OF APPLICANT AND LIMITATIONS OF TRADING

PRIVILEGES

(a) Notwithstanding Kalshi’s authority granted under any other Rule, Kalshi may, in its sole discretion,

deny any Member application, or suspend, revoke, limit, condition, restrict, or qualify the trading

privileges of any account owner pursuant to this section (a) or authorized trader of an account owner

as it deems necessary or appropriate.

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(b) An account owner who has had trading privileges limited pursuant to Section (a) of this Rule will be

provided, in writing, the reason such action was taken.

(c) If Kalshi denies the Member Application of any Person or places limitations on trading privileges

pursuant to this section, the applicant whose trading privileges have been limited may appeal the

decision by filing with Kalshi a petition for review of such membership denial or trading limitation.

The petition should describe in detail the reasons why the Member Application should be granted, or

trading limitations removed. The petition must be filed within twenty-eight (28) calendar days from

the date upon which notice of the denial of membership or limitation of trading privileges was

provided by Kalshi. The decision of the Company will be final. A Person that has been denied

membership by the Company will not be eligible for reapplication during the six months immediately

following such denial.

(d) If trading privileges are limited pursuant to Section (a) of this Rule, Kalshi may initiate a transfer of

the Member’s balance to the bank account on record, or cause for the same to be affected by the

Derivatives Clearing Organization.

(e) Kalshi has full discretion to limit or restrict a Member from trading in specific Contracts or categories

of Contracts to mitigate risks of market manipulation

RULE 3.4 COMMUNICATIONS BETWEEN KALSHI AND MEMBERS

(a) Each Member must provide Kalshi with its current electronic mail address and immediately notify the

Company of any changes. All communications between Kalshi and its Members, including

confirmation of all Transactions executed on a Member Account, may be transmitted by electronic

mail on the Kalshi website or via the Kalshi API.

(b) A Member is responsible for promptly reviewing and, if necessary, responding to all electronic

communications from Kalshi.

(c) Kalshi may record conversations and retain copies of electronic communications between the

Company and Members. Any such recordings may be retained by the Company in such manner and

for such periods of time as Kalshi may deem necessary or appropriate. Kalshi shall retain such

records for the retention periods necessary to comply with CFTC Regulation 1.35 or such longer

period as the Company deems appropriate.

RULE 3.5 MEMBER FUNDS MAINTAINED WITH THE COMPANY

All Member funds deposited with Kalshi’s clearing partner, [REDACTED], shall be held in accordance

with CFTC Regulations in accounts identified as a Member Accounts. Such funds shall be segregated by

the Derivatives Clearing Organization and treated as belonging to such Members.

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RULE 3.6 DUES, FEES, AND EXPENSES PAYABLE BY MEMBERS

(a) Members are not required to pay dues.

(b) Members may be charged fees in connection with the trading of Contracts in such amounts as may be

revised from time to time to be reflected on the Company’s Website.

(c) Members may be charged fees for settlement of Contracts at Expiration in an amount to be reflected

from time to time on Kalshi’s website.

(d) Kalshi or its clearing partner may also deduct from the Member Account fees or expenses incurred in

connection with the Member’s trading or account activity or Kalshi’s administration in connection

with that activity, such as fees for wire transfer or other payment methods processing fees. All such

fees will be charged in an amount to be reflected from time to time on the Company’s Website.

(e) If Kalshi determines in the future to impose dues or additional fees, the Member will be provided

notice of the change at the time the amended fees are filed with the Commission. The new fee

structure will be implemented no earlier than on the first available trade date for which the change

may be implemented according to the Commission’s self-certification filing requirements as set forth

in Commission Regulation 40.6(a).

CHAPTER 4 [RESERVED]

CHAPTER 5 METHOD FOR MEMBERS TO TRADE CONTRACTS

RULE 5.1 PRIOR REVIEW OF THESE RULES AND ACCEPTANCE OF TERMS OF

MEMBER AGREEMENT

No Person may become a Member of Kalshi or trade any Contracts on the Platform unless such Person

has received, read, understood, and accepted the Kalshi Rulebook, Terms of Use, Privacy Policy, and

Member Agreement, and has certified having done so.

RULE 5.2 MEMBER ACCESS TO KALSHI

(a) During the Kalshi Member Application process, an applicant to become a Member will be required to

choose a user identification (“ID”) and password. The applicant will be required to enter the ID and

password to log onto and access secure portions of the Kalshi website. Each time the applicant

submits its unique user ID and password to Kalshi in order to log onto Kalshi, the applicant affirms

that it understands and agrees to be bound by these Rules and other policies of Kalshi, as amended.

(b) After a Member Application has been approved by Kalshi, the applicant shall be notified of its

designation as a Member. As a Member, such Person will be able to access the Platform, execute

25
Trades, and otherwise access information regarding, or perform functions in, such Person’s account

using its ID and unique password.

(c) For account security and audit trail purposes, each Member agrees that Kalshi may maintain logs of

its IP address used to access the Kalshi website.

(d) Each Member will be responsible for protecting its ID and password from improper disclosure. In

addition, a Member may not knowingly or negligently permit any Person not authorized by Kalshi

and by the Member to use the ID and password to access the secure portion of the Kalshi website.

Each Member is required to immediately notify Kalshi if it knows, or has reason to believe, that its ID

or password have been disclosed to any Person not authorized by Kalshi and the Member to use such

ID and/or password.

(e) Each Member will be liable for all costs and any losses that it may incur from Transactions executed

on the Platform by any Person, authorized or not, using its ID and password. Kalshi will not be

responsible in any way for unauthorized Transactions in a Member Account.

(f) Each Member is responsible for contracting with an Internet service provider through which it will

access the Kalshi website and for having a backup service provider if the Member thinks it is

necessary. Each Member is also responsible for maintaining an Internet connection speed adequate

for its needs. Kalshi will not be responsible in any way for any orders delayed or trades missed or not

executed in a timely fashion because of failure of the Member’s Internet service provider or slowness

of its Internet connection speed. No communication from a Member will be deemed to have been

received by Kalshi until that communication is logged by the Kalshi server.

(g) Kalshi in its discretion may place a Member Account on hold (prohibiting any order activity) or on

hold-liquidation only (allowing only orders to liquidate existing positions). In such circumstances,

Kalshi will promptly notify the affected Member of the nature of and reason for the action.

RULE 5.3 TRADING CONTRACTS – MEMBERS

(a) Members will be able to trade Contracts by entering Orders on such Contracts. After logging into the

secure portion of the Kalshi website, the Member will input its Orders into the Platform.

(b) When a Member’s Order is matched by an Order from another Member:

(1) If the Member’s Order is to enter into one or more Contracts for which it does not have an

offsetting position in its account, Kalshi will check the Member Account to ensure it has enough

funds to cover its maximum loss under the Contract(s) it is attempting to enter into. If the

Member does not have the necessary funds in its account, Kalshi will cancel its order prior to

trade execution. If the Member does have the necessary funds in its account, Kalshi will execute

the trade. Upon trade execution, Kalshi will:

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(i) Debit the funds from the Member Account in an amount necessary to cover the maximum

loss;

(ii) Credit those funds to the Kalshi settlement account;

(iii) Place the Contracts that were the subject of the Order into the Member Account; and

(iv) Notify the Member by electronic mail that the Trade has been executed.

(2) If the Transaction involves entering into one or more Contracts for which a Member has an

offsetting position in its account, upon execution of the Trade Kalshi will:

(i) Close the offsetting position in the Member Account;

(ii) Debit the Kalshi settlement account in the amount of any gains realized by the offsetting

Transaction and any funds that were debited from the Member Account at the time the

Contract(s) that is being closed was entered into and that were not also used to pay any

losses on such Contract(s);

(iii) Credit those amounts to the Member Account; and

(iv) Notify the Member by electronic mail that the Trade has been executed.

(c) If a Member’s Order is placed on the Platform and not immediately matched by an Order from

another Member, it will rest on the Platform until it is matched and executed in accordance with the

procedures outlined above in this Rule, until the Member cancels it, or until it is cancelled by Kalshi

upon the Expiration of the Contract or otherwise in accordance with these Rules.

RULE 5.4 ORDER ENTRY

(a) Member Orders

(1) A Member will enter Orders to trade Contracts by electronic transmission over the Internet. Order

rate limiter functionality will cap the maximum number of orders that may be submitted to the

Exchange per second (or per a specific time period expressed in seconds) per Member in order to

prevent a risk of harm to the Company.

(2) A Member will enter an Order to trade one or more Contracts by indicating to Kalshi in the

manner required by Kalshi:

(i) Order direction (i.e., buy/yes or sell/no);

(ii) Duration of the Order;

(iii) Price at which the Member wants to buy or sell the Contract; and

(iv) Number of Contracts the Member wants to buy or sell.

(3) In order to enter an Order to trade one or more Contracts, a Member will be required to submit

the Order to Kalshi. Once the Order is accepted by Kalshi, Kalshi will assign to the Order an

Order ID. This ID will appear next to the associated Order on the Member’s Order Ticket and

Order History account pages. The Member will be responsible for any and all Order entries

confirmed for its account and accepted by Kalshi.

(4) Any Member submitting Orders, or any other messages directly to Kalshi, including but not

limited to messages related to the cancellation or amendment of an Order, whether manually or

via automated functionality, must ensure adequate controls are in place to prevent excessive

messaging or other activity that may be deemed detrimental or disruptive to the Company.

27
(b) Kalshi’s trading system will keep an electronic record of all orders to trade Contracts, and all

executed Contract trades. The records kept by Kalshi will include all of the terms identified in

paragraph (a) of this Rule as well as the date and time that the Transaction was completed to the

nearest thousandth of a second and the member ID, for all executed Contract trades and to the nearest

thousandth of a second for all Orders to trade Contracts.

(c) A Kalshi Contract will not be void or voidable due to:

(1) A violation by Kalshi of the provisions of sections 5 or 5h of the CEA or Part 38 of CFTC

Regulations;

(2) Any CFTC proceeding to alter or supplement a rule, term or condition under section 8a(7) of the

CEA or to declare an emergency under section 8a(9) of the CEA; or

(3) Any other proceeding where the effect of which is to alter or supplement a specific term or

condition or trading rule or procedures, or requires Kalshi to adopt a specific term or condition,

trading rule or procedure, or to take or refrain from taking a specific action.

RULE 5.5 HANDLING OF CUSTOMER ORDERS

(a) Disclosing Orders Prohibited

(1) It is a violation of this Rule 5.5 for any Person to disclose another Person’s Order to buy or sell

any Contracts except as may be requested by Kalshi or the Commission.

(2) It is a violation of this Rule 5.5 for any Person to act or direct another Person to act based on

non-public order information, however acquired.

RULE 5.6 DISPUTED ORDERS

(a) If a Member believes that an Order to trade one or more Contracts was incorrectly executed or

rejected by Kalshi that Member may request a review of the Order by providing the confirmation

number for the order and stating the grounds for its disagreement with the handling of the order.

(b) Upon receipt of a request for review of an Order and the accompanying confirmation number, Kalshi

will review its electronic audit trail to determine if the Kalshi trading system correctly interpreted and

executed the Order.

(c) If the review described in paragraph (b) of this Rule reveals that the Kalshi trading system made a

mistake, the Order will be cancelled and the accounts of all Members that were party to the Order will

be returned to their state before the Trade was executed.

(d) If the review described in paragraph (b) of this Rule reveals that the Kalshi trading system did not

make a mistake, Kalshi will inform the Member who requested the review of its determination that

the Order was properly handled, the evidence supporting that determination, and that an adjustment

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will not be made.

(e) A Member may appeal a determination under paragraph (d) of this Rule to a Kalshi compliance

officer through the electronic mail address provided on the Kalshi website. The Member making the

appeal will be required to provide a response to the evidence described in paragraph (d) of this Rule

that the order was properly handled, and the Member may provide any other information it wishes to

disclose. If the Member’s appeal does not contain a response to the evidence described in paragraph

(d), it will be rejected. The compliance officer will decide on the appeal no later than 10 days after its

receipt, and that decision will be final.

(f) Kalshi will document in writing all requests for review of orders received by Kalshi, the time and

manner in which Kalshi reviewed its electronic audit trail in response to the request, the outcome of

that review, and the action or actions taken by Kalshi in response to that review, including the results

of any appeal filed under paragraph (e) of this Rule and the review conducted by the compliance

officer in deciding that appeal.

RULE 5.7 PRIORITY OF ORDERS

Kalshi’s central limit order book matches orders in an open and competitive manner. Subject to the

provisions of Rule 5.10(b) regarding orders, Kalshi’s trading algorithms execute all trades by matching

orders according first by price and then time priority. This means that orders and quotes entered at

different prices will be executed in order of price, from best to worst, regardless of what time they were

placed on the Platform, and orders and quotes placed on the Platform at the same price will be executed in

order of time, from oldest to most recent.

RULE 5.8 FILLING ORDERS TO TRADE CONTRACTS

(a) Subject to the provisions of Rule 5.10(b) regarding orders, the Kalshi trading system will fill all

orders to trade Contracts on an “or better” basis. This means that if a Member places an Order to buy

a Contract or Contracts at a price higher than the price of the best sell offer on the Platform, the

system will fill that Order to buy at the better sell offer price(s) until all available sell offers under or

equal to that buy Order’s limit price are filled or until that buy order is completely filled. Likewise, if

a Member enters a sell order at a price lower than the price of the best bid, the system will fill that sell

order at the better bid price(s) until all available bids over that sell order’s limit price are filled or that

sell order is completely filled. If an order is only partially filled, the unfilled portion of that order will

remain in the order book as a resting order at the limit price specified. Should an opposite Order at the

same price or better than the original Order subsequently be placed on the system, the unfilled portion

of the original Order will be executed opposite that new Order at the original Order’s limit price.

(b) A written record of all of the terms of each Trade entered into on Kalshi or pursuant to the Rules will

be available immediately upon execution on the Kalshi interface on the Member’s activity page. Such

record shall legally supersede any previous agreement and serve as a confirmation of each such trade.

Kalshi will send confirmation messages to Members upon execution of a Trade via the API, mobile

29
application, and/or website, if such Members are online at the time. However, please note that if any

applicable Member is not online at the time of execution, such Member will see the confirmation(s)

when it next logs on to the interface. The contract type, size, execution time and execution method for

each Trade will be made available on the website to all Members after execution of the relevant

Trade.

RULE 5.9 CANCELLATION OF ORDERS

(a) A Member can submit instructions, via Kalshi’s interface (website, mobile application) or the API, to

cancel an Order which that Member has placed on the Platform if that Order has not yet been

executed. Upon submission of instructions to either cancel or modify an Order that has not been

executed, the Kalshi system will withdraw the Order from the order book and confirm the

cancellation of the Order.

(b) Kalshi will attempt to cancel an existing Order as soon as possible after a Member enters a

cancellation instruction. However, the Order may be executed before Kalshi is able to cancel it. If an

Order has been filled in whole or in part, a Member may cancel only that portion of the Order (if any)

that has not been executed.

RULE 5.10 TRADE CANCELLATIONS

(a) As a designated contract market, Kalshi has the authority to adjust trade prices or cancel trades when

necessary to mitigate market disrupting events caused by malfunctions on its Platform or errors in

Orders submitted by Members. However, due to the fully collateralized and short-term nature of

trading on Kalshi, the circumstances in which this authority may be exercised are limited.

(b) Because of the nature of Kalshi Contracts, there will generally be no cancellation or adjustment of an

erroneous trade except in extraordinary circumstances as determined by the Company.

(c) After the settlement outcome is determined, it is posted on the Platform and an email is distributed to

all Members who participated in the Contract. [REDACTED]

RULE 5.11 VIEWING THE MARKET AND EXECUTED ORDERS

Kalshi will, at all times, allow its Members to view the current best bid and offer on the Platform, the

open interest, the trade volume, as well as the depth of the order book up to the fifth level of prices.

RULE 5.12 HOURS FOR TRADING CONTRACTS

Trading shall be available at all times outside of any maintenance windows, which may be announced

from time to time.

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RULE 5.13 PROHIBITED TRANSACTIONS AND ACTIVITIES

(a) Members are prohibited from entering Orders on the Platform if there are insufficient funds or

Contracts in the Member’s settlement account to satisfy such orders if they are executed. Kalshi may,

in its discretion, take such action against a Member if the circumstances warrant, subject to Rule

9.2(f) and Rule 9.6.

(b) No Person shall enter into or attempt to enter into any non-competitive trade on the Platform,

including any accommodation trade or any trade that has been directly or indirectly prearranged. For

example, a Member may not agree in advance with another Member that one of the Members will

enter an order and the other Member will attempt to trade against that order by timing the submission

of orders or otherwise.

(c) No Person shall enter into or attempt to enter into any trade on the Platform that:

(1) Does not result in a change in beneficial ownership;

(2) Is designed to unnaturally inflate trading volume;

(3) In any way attempts to circumvent the Platform’s order processing, trade ordering, trade

execution systems, or otherwise to circumvent exposure of the order to open and competitive

bidding on the Platform; or

(4) That has some other illegitimate purpose.

(d) No Person shall enter into any trade designed or used to cause any price for a Contract other than a

true and bona fide price to be reported, registered, or recorded by the Platform.

(e) No Person shall trade in, transfer, assign, or otherwise dispose of Contracts other than as provided for

in these Rules.

(f) No Person shall enter into or agree to transfer or transfer the benefit of any position in any Contract to

another person other than through a transaction executed through the Platform.

(g) (1) No Member shall trade for a Person other than itself.

(2) No Member may deposit funds or allow funds to be deposited into their Kalshi account from any bank

account or credit card or debit card or other account not held in the same name as their Kalshi

account.

(h) No Person shall engage in any activity that presents a risk of harm to Kalshi, its Members, or the

public.

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(i) No Person shall engage in any activity that adversely affects the integrity of the Platform or its

underlying systems.

(j) No Person subject to arbitration under these rules shall fail to abide by an arbitration decision or

award handed down under Chapter 10 of these Rules.

(k) No Person shall intentionally provide misleading, erroneous, or fraudulent information to Kalshi on a

Member Application or otherwise.

(l) No Person shall create a false appearance of a partnership, agency, employment or affiliate

relationship with Kalshi and no Person shall unlawfully solicit customer funds for deposit at Kalshi.

(m) No Member may operate or solicit in any capacity that may require registration with the CFTC

without being properly registered.

(n) No Person shall engage in any activity that is intended to, or has the effect of, manipulating the

market in violation of Sections 6(c) and 9(a)(2) of the CEA and no Person shall engage in any other

activity that would violate the CEA or the Commission’s Regulations.

(o) No Member shall deposit funds into its Kalshi account from an account which does not hold sufficient

funds at the time of deposit, and at the time the deposit is presented by Kalshi for payment.

(p) No Member shall make a false representation to a third party regarding any deposit made into that

Member’s Kalshi account which would result in a chargeback or stop payment of funds to the

Member Account.

(q) No Member shall allow its Member Account balance to become negative by any means. In the event

that a Member’s settlement account balance becomes negative, the Member must immediately deposit

additional funds to correct the deficiency. Any Member whose settlement account carries a negative

balance for 30 days or more is subject to summary termination of membership. Kalshi may, in its

discretion, take such other action against a Member if the circumstances warrant, subject to Rule

9.2(f) and Rule 9.6.

(r) No Member shall engage in conduct or practices inconsistent with just and equitable principles of

trade or conduct or practices detrimental to the best interests of the Company.

(s) If a Member is an Insider that has access to material non-public information that is the subject of an

Underlying of any Contract, that Member is prohibited from attempting to enter into any trade or

entering into any trade, either directly or indirectly, on the market in such Contracts. An “Insider”

means any person who has access to or is in a position to have access to material non-public

information before such information is made publicly available.

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(t) If a Member is a decision maker, either directly or indirectly, or has any influence, either directly or

indirectly, no matter the scale and importance of the influence, on the outcome of the Underlying

(event) of any Contract, that Member is prohibited from attempting to enter into any trade or entering

into any trade, either directly or indirectly, on the market in such Contracts.

(u) No Person shall engage in any activity that constitutes fraudulent or abusive trading, including but not

limited to violating bids or offers, demonstrating intentional or reckless disregard for the orderly

execution of transactions during the closing period, or spoofing.

(v) No Person shall engage in any trading activity intended to accomplish a “money pass”.

RULE 5.14 POSITION LIMITS

(a) Kalshi has imposed Position Limits (defined as maximum loss exposure) of [REDACTED on all

Contracts. Any Member who exceeds a Position Limit shall be deemed in violation of this Rule 5.14.

In addition, any Member entering bids or offers, if accepted, which would cause that Member to

exceed the applicable Position Limit shall be in violation of this Rule.

(b) If a Member fails to reduce any position in a manner and time as directed by Kalshi, Kalshi shall have

the authority to liquidate the applicable position to a level below the defined Position Limit stipulated

under the relevant Contract in Chapter 13 of these Rules.

(c) In addition to the restrictions and requirements imposed in Section 5.14(a) and (b), the first violation

of a Position Limit by a Member may result in a letter of warning to be issued by the Kalshi

Compliance Department to the Member or the initiation of proceedings in accordance with Chapter 9

of these rules.

(d) In addition to the restrictions and requirements placed in Section 5.14(c), any subsequent violation of

a Position Limit by a Member within 12 months after a violation that resulted in a letter of warning,

will result in the initiation of proceedings in accordance with Chapter 9 of these Rules.

(e) Position limits shall apply to

(1) All positions in accounts for which any Person by power of attorney or otherwise, directly or

indirectly holds positions or controls trading; and

(2) Positions held by two or more Persons acting pursuant to an express or implied agreement or

understanding the same as if the positions were held by, or the trading of the position were done

by, a single individual.

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CHAPTER 6 CLEARING AND SETTLING CONTRACT TRADES,

CONTRACTS AT EXPIRATION, AND MEMBER WITHDRAWAL

REQUESTS

RULE 6.1 CLEARANCE

(a) In its capacity as a registered Derivative Clearing Organization, [REDACTED] shall serve as the

clearing party to all orders matched pursuant to Chapter 5.

(b) All Member positions are fully cash collateralized, and no Member can take positions that would lead

to an exposure that exceeds the funds deposited in the Member Account.

(c) Upon the successful matching of orders pursuant to Rules 5.3 or 5.4 the Derivatives Clearing

Organization shall immediately, through the process of novation, be substituted as, and assume the

position of, seller to the Member buying and buyer to the Member selling the relevant contract. Upon

such substitution, the buying and selling Members shall be released from their obligations to each

other, and such Member shall be deemed to have bought the contracts from or sold the contracts to

the Derivatives Clearing Organization, as the case may be, and the Derivatives Clearing Organization

shall have all the rights and be subject to all the liabilities of such Member with respect to such

transaction. Such substitution shall be effective in law for all purposes.

(d) If a trade is rejected for clearing by the Derivatives Clearing Organization for any reason, such trade

is void ab initio.

RULE 6.2 SETTLING CONTRACT TRADES

Kalshi will maintain, on its system, a record of Member balances and Contracts. Kalshi will also maintain

a Member Account, which will reflect funds used by Members to buy and sell Contracts. Kalshi may also

maintain a “proprietary account,” which will be credited with all fees debited from Member Accounts due

to trades and expiration settlements.

RULE 6.3 SETTLING CONTRACTS AT EXPIRATION

(a) When a Contract expires and has a Payout Criterion that encompasses the Expiration Value of the

Underlying, such Contract will pay the Settlement Value for such Contracts (e.g. $1) to the holders of

long positions in such Contracts. Conversely, when a Contract expires and has a Payout Criterion that

does NOT encompass the Expiration Value of the Underlying, such Contract will pay the Settlement

Value for such Contracts (e.g. $1) to the holders of short positions in such Contracts.

(b) On the Settlement Date;

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(1) Kalshi will notify all Members which Contract is going to pay a Settlement Value and which

Contract will not pay a Settlement Value.

(2) Kalshi will immediately settle the Contracts by debiting the Kalshi settlement account in an

amount no less than the Settlement Value for such Contracts multiplied by the total number of

outstanding in-the-money Contract positions and credit those funds to the applicable Member

Accounts of the Members holding the in-the-money Contract positions.

(3) Kalshi will delete all Contracts from Members’ accounts, as applicable.

(c) [REDACTED]

(d) Kalshi will distribute notification via electronic mail at settlement to all Members who participated in

the relevant Contract.

RULE 6.4 SETTLING MEMBER WITHDRAWAL REQUESTS

(a) Within one business day of when a Member requests to withdraw funds from its Kalshi account,

Kalshi will transmit such request to its Derivatives Clearing Organization in electronic batch mode

transmission. [REDACTED] will process the request and distribute funds to the account at the U.S.

Financial Institution or Foreign Bank in the case of a non-United States resident Member who does

not have an account at a US Financial Institution, registered with Kalshi by the Member (unless the

Member has unsatisfied outstanding obligations on Kalshi, in which case Kalshi may retain such

balances as necessary to satisfy such obligations or until the Member otherwise satisfies such

obligations). The Member should refer to Kalshi’s website under the Fee Schedule for all fees and

costs associated with withdrawal of funds from the Member’s Kalshi account. Kalshi may suspend or

deny the processing of a Member withdrawal request if circumstances, whether present or imminent,

would make the request impossible or impractical to fulfill, cause a potential risk of harm to Kalshi or

its Members, or if, in its discretion, Kalshi determines the funds are relevant to a pending

investigation.

(b) Members are responsible for providing accurate account numbers to allow Kalshi and its clearing

partner, [REDACTED], to effect transfers to Members.

CHAPTER 7 ADJUSTMENTS NECESSITATED BY MATERIAL

CHANGES IN THE UNDERLYING AND DISPUTE RESOLUTION

RULE 7.1 DISPUTE RESOLUTION

[REDACTED]

RULE 7.2 GOVERNMENT ACTIONS

Any change in instructions, order, ruling, directive, or law issued or enacted by any court or agency of the

Federal Government of the United States that conflicts with the Rules contained in this Chapter shall take

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precedence, immediately become a part of these Rules, and be effective for all currently traded and newly

listed Contracts.

CHAPTER 8 INVESTMENT OF MEMBER ACCOUNT FUNDS

RULE 8.1 INVESTMENT OF MEMBER ACCOUNT FUNDS

(a) Member funds on deposit with Kalshi and funds in the Kalshi settlement account will be segregated

as Member Property, as that term is defined in in CFTC Regulation 190.09(a).

(b) Kalshi may invest such funds subject to the limitations and conditions set forth in Commission

Regulations 22.2(e)(1) and 1.25.

(c) Kalshi may pay interest to Members’ accounts at a floating rate to be determined by the Company on

funds in Members’ accounts in excess of an amount to be determined by the Company.

(d) Kalshi will retain all profit from investment of Member funds not paid to Members.

CHAPTER 9 DISCIPLINE AND RULE ENFORCEMENT

RULE 9.1 MONITORING THE MARKET

(a) Kalshi’s trading system will record and store for a period of not less than 5 years in a searchable,

read-only database a record of all data entered into the Kalshi trading system, including the Member’s

identity and the information in Rule 5.4. Such records shall be maintained in a readily available

manner during the first two years. Kalshi shall conduct market surveillance and trade practice

surveillance using this data with programs designed to alert Kalshi when potentially unusual trading

activity takes place. Kalshi, through the compliance department, will initiate review and, where

appropriate, investigate such unusual trading activity. The compliance department will also

investigate any time it has other reason to believe that inappropriate activity of any sort is taking place

on the Kalshi Platform or its website.

(b) All Persons within Kalshi’s jurisdiction are subject to this Chapter 9 if they are alleged to have

violated, to have aided and abetted a violation, to be violating, or to be about to violate, any Rule or

any provision of Applicable Law for which Kalshi possesses disciplinary jurisdiction.

RULE 9.2 INVESTIGATIONS, HEARINGS, AND APPEALS

(a) The Compliance Department shall investigate unusual trading activity or other activity that the

Compliance Department has reasonable cause to believe could constitute a violation of these Rules, or

upon the receipt of a request from Commission staff. Kalshi’s Disciplinary Panel adjudicates findings

by the compliance department that are disputed by Members. The Disciplinary Panel and the

36
Compliance Department may not communicate regarding the merits of a matter brought before the

hearing officer without informing the Member who is the subject of the communication of its

substance and allowing the Member an opportunity to respond. The Compliance Department and

Disciplinary Panel may compel testimony, subpoena documents, and require statements under oath

from any Member. Disciplinary Panel, Compliance Department staff and other employees or agents

of Kalshi working under their supervision, may not be a Member or trade, directly or indirectly, in

any commodity interest traded on or subject to the rules of any registered contract market. Members

of the Disciplinary Panel shall be individuals that do not have a direct interest (financial, personal or

otherwise) in the matter, but in no event may be members of the Compliance Department or any

Persons involved in adjudicating any other stage of the same proceeding.

(b) The compliance department shall investigate unusual trading activity or other activity that the

compliance department has reasonable cause to believe could constitute a violation of these Rules,

and shall enforce the Rules and prosecute possible Rule violations within Kalshi’s disciplinary

jurisdiction. The Compliance Department will endeavor to complete any investigation within twelve

months, unless there exists significant reason to extend it beyond such period. Upon the conclusion of

any investigation, the Compliance Department will draft a document detailing the facts that led to the

opening of the investigation, the facts that were found during the investigation, and the Compliance

Department’s analysis and conclusion. If the Compliance Department concludes that there is

reasonable cause to believe a Member has violated Kalshi’s Rules or other applicable statutes or

regulations, the Compliance Department will submit to the Member whose activity is the subject of

the investigation a report, by electronic mail to that Member’s last known email address, that will

include:

(1) The reason the investigation was initiated;

(2) The charges or a summary of the charges, including the rule or rules alleged to have been

violated;

(3) The response, if any, or a summary of the response;

(4) A summary of the investigation conducted;

(5) Findings of fact and the Compliance Department’s conclusions as to each charge, including

which of these Rules the Member or its authorized representative violated, if any;

(6) A summary of the Member’s, and any relevant authorized representative’s, disciplinary history, if

any; and

(7) The penalty, if any, proposed by the Company.

(c) If the Compliance Department initiates an investigation in which any Affiliate of Kalshi is a subject,

the Chief Compliance Officer shall notify the Commission’s Division of Market Oversight of that

fact. At the conclusion of any such investigation, the Chief Compliance Officer shall provide the

Commission’s Division of Market Oversight with a copy of the documentation specified in paragraph

(b) of this Rule.

(d) The Member whose activity is the subject of the investigation may contest the Compliance

Department’s findings by forwarding a response to those findings by electronic mail to the

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Compliance Department within 15 days. The Member has a right to examine all relevant books,

documents, or other evidence in the possession or under the control of Kalshi, except that Kalshi may

withhold from inspection any documents that:

(1) Are privileged or that constitute attorney work product;

(2) Were prepared by any employee of Kalshi but which will not be offered in evidence in the

disciplinary proceedings;

(3) May disclose a technique or guideline used in examinations, investigations, or enforcement

proceedings; or

(4) Disclose the identity of a confidential source.

The Member’s response must contain a detailed response to the findings and conclusions as to each

charge and any other information the Member thinks is relevant. The outcome of settlement negotiations

between the Member and the Compliance Department may include, but is not limited to, a letter of

warning.

(e) The Member whose activity is the subject of the investigation may request to enter settlement

negotiations by forwarding a response to the Compliance Department’s findings by electronic mail to

the Compliance Department within 15 days. The Member has a right to examine all relevant books,

documents, or other evidence in the possession or under the control of Kalshi, except that Kalshi may

withhold from inspection any documents that:

(1) Are privileged or that constitute attorney work product;

(2) Were prepared by any employee of Kalshi but which will not be offered in evidence in the

disciplinary proceedings;

(3) May disclose a technique or guideline used in examinations, investigations, or enforcement

proceedings; or

(4) Disclose the identity of a confidential source. The Member’s response must contain a response to

each charge and the Member may provide any other information the Member thinks is relevant.

The outcome of settlement negotiations between the Member and the Compliance Department

may include, but is not limited to, a letter of warning.

(f) If the findings of the Compliance Department are not contested by the Member, Kalshi will deem

those findings admitted by the Member, the findings of fact and the Compliance Department’s

conclusions as to each charge shall become final and the Compliance Department shall impose the

penalty (if any) proposed by the Compliance Department. The Member will be notified of the

imposition of any penalty and sent a copy of the notice of disciplinary action by electronic mail to that

Member’s last known email address.

(g) If the findings of the Compliance Department are contested, the Compliance Department’s report and

the Member’s response will be submitted to the Disciplinary Panel. The hearing officer may not have

a financial, personal or other direct interest in the matter under consideration.

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(1) The Disciplinary Panel will conduct a hearing with the Compliance Department and the Member

within 20 business days of receipt of the Member’s response contesting the compliance officer’s

finding and/or proposed sanction which the parties may attend telephonically. The formal rules of

evidence shall not apply, but the hearing must be fair.

(2) Prior to the hearing, the parties may (but need not) submit proposed findings, briefs, and exhibits

(including affidavits), and during the hearing the parties may present witnesses.

(3) Within 20 business days after that hearing, the hearing officer will issue findings, which will be

delivered to the Member by electronic mail to the Member’s last known email address. The

findings of the hearing officer will contain the following information:

(i) A summary of the charges and any answer to the charges;

(ii) A summary of the evidence received;

(iii) Findings and conclusions with respect to each charge;

(iv) An indication of each specific rule that the member was found to have violated;

(v) A declaration of any penalty to be imposed on the Member as the result of the findings and

conclusions;

(vi) The effective date and duration of that penalty; and

(vii) A statement that the Member has the right to appeal any adverse decision by the panel to

the Appeals Committee and must do so within 15 days.

(4) The panel’s decision shall be final on the date it is signed by the hearing Disciplinary Panel. The

hearing officer’s decision shall become the final decision of Kalshi after the appeal period has

lapsed.

(5) The hearing will be recorded, and all information submitted by the parties (including the

Compliance Department’s report and the Member’s response) as well as the recording of the

hearing, will be preserved by the Compliance Department, along with the hearing officer’s

findings, as the record of the proceedings (the “hearing record”).

(h) Either the Member or the Compliance Department may appeal the decision of the panel within 15

days by filing an appeal by electronic mail with the Appeals Committee and forwarding a copy to the

other parties to the appeal. Any penalties will be stayed pending appeal unless the hearing officer

determines that a stay pending appeal would likely be detrimental to the Company, other Members, or

the public. The Appeals Committee will review the hearing record and any information submitted by

the Compliance Department and the Member on appeal and issue its decision, which shall be final on

the date of such issuance. The Member shall be notified of the decision by electronic mail to the

Member’s last known email address. The hearing record, any information submitted on appeal, and

the Appeals Committee’s decision shall be preserved as the record on appeal. The decision will

contain the information listed in paragraph (f) of this Rule, outside of (f)(5), as well as:

(1) A statement that any person aggrieved by the action may have a right to appeal the action

pursuant to Part 9 of the Commission’s Regulations, within 30 days of service; and

(2) A statement that any person aggrieved by the action may petition the Commission for a stay

pursuant to Part 9 of the Commission’s Regulations, within 10 days of service.

39
(i) No Kalshi officer or employee shall interfere with or attempt to influence the process or resolution of

any disciplinary action, except to the extent provided under these Rules with respect to a proceeding

in which a Person is a member of the relevant Disciplinary Panel or Appeals Committee.

RULE 9.3 SETTLEMENT OF INVESTIGATIONS

(a) Kalshi may enter into settlements with any Member who is the subject of an investigation. The

Member may initiate a settlement offer. Any settlement offer shall be forwarded to a Kalshi

disciplinary panel with a recommendation by the Compliance Department that the proposed

settlement be accepted, rejected, or modified. A settlement offer may be withdrawn at any time before

it is accepted by the hearing officer.

(b) The panel may accept or reject a proposed settlement, and the decision of the relevant panel will be

final. In addition, the panel may propose a modification to the proposed settlement for consideration

by the Member or its authorized representative and the Compliance Department.

(c) Any settlement under this Rule will be written and will state:

(1) The charges or a summary of the charges;

(2) The response, if any, or a summary of the response;

(3) A summary of the investigation conducted;

(4) Findings and conclusions as to each charge, including each act the person charged was found to

have committed or omitted, be committing or omitting, or be about to commit or omit, and each

of these Rules that such act or practice violated, is violating, or is about to violate; and

(5) Any penalty imposed and the penalty’s effective date.

(d) Failed settlement negotiations, or withdrawn settlement offers, will not prejudice a Member or

otherwise affect subsequent procedures in the rule enforcement process.

RULE 9.4 NOTICE AND PUBLICATION OF DISCIPLINARY ACTION

(a) Kalshi will provide to the Person charged, notice of the disciplinary action, appeal determination, or

settlement in which sanctions are imposed, no later than two business days after it becomes final in

accordance with the provisions of Commission Regulation 39.19(c)(4)(xi).

(b) Kalshi will make public notice of the disciplinary action by posting on its website, in accordance with

Commission Regulation 9.13, the information required by Commission Regulation 9.11. The

disciplinary action will be considered final on the date the notice of the disciplinary action is

published on the Kalshi website.

RULE 9.5 PENALTIES

As a result of a disciplinary proceeding or as part of a settlement, Kalshi may impose one or more of the

following penalties:

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(a) A letter of warning, censure, or reprimand (although no more than one such letter may be issued to

the same Person found to have committed the same rule violation within a rolling twelve-month

period);

(b) A fine or penalty fee, which Kalshi may deduct from the Member Account balance;

(c) Disgorgement of profits that resulted from the violation of any Rule, which Kalshi may deduct from

the Member Account balance;

(d) Suspension of Member status or privileges for a specified period, including partial suspension of such

privileges (for example, suspension of trading privileges in particular types of Contracts or of

placement of certain types of orders);

(e) Revocation of Member status or privileges, including partial revocation of such privileges (for

example, revocation of trading privileges in particular types of Contracts or of placement of certain

types of orders); and

(f) Interest, at the prime rate, as reported by the Wall Street Journal as of the date the amount becomes

due, on any outstanding account balance, monetary fine, penalty fee, or disgorgement amount owed,

compounded monthly and calculated from the date when the amount was first due and payable.

RULE 9.6 SUMMARY SUSPENSION

(a) Kalshi may summarily suspend or restrict a Member privileges if the Chief Compliance Officer

believes suspension or restriction is necessary to protect the markets, Kalshi, the public, or other

Members.

(b) Whenever practicable Kalshi will notify the Member whose privileges are to be summarily suspended

by electronic mail before the action is taken. If prior notice is not practicable, the Member shall be

served with notice by electronic mail at the earliest opportunity. This notice shall:

(1) State the action taken or to be taken;

(2) Briefly state the reasons for the action;

(3) State the time and date when the action became or becomes effective and its duration; and

(4) State that any Member aggrieved by the action may petition the Commission for a stay of the

effective date of the action pending a hearing pursuant to Part 9 of the Commission’s Regulations,

within 10 days of service.

(c) The Member whose privileges are to be summarily suspended shall be given an opportunity for

appeal under the procedures outlined in Rule 9.2(f) of these Rules. The decision affirming, modifying,

or reversing the summary suspension shall be furnished by electronic mail to the suspended Member

and the Commission no later than one business day after it is issued. The decision shall contain:

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(1) A description of the action taken and the reasons for the action;

(2) A brief summary of the evidence received during the appeal process;

(3) Findings and conclusions;

(4) A determination as to whether the summary action that was taken should be affirmed, modified,

or reversed;

(5) A declaration of any action to be taken against the suspended Member as the result of that

determination;

(6) The effective date and duration of that action;

(7) A determination of the appropriate relief based on the findings and conclusions;

(8) A statement that any person aggrieved by the action may have a right to appeal the action

pursuant to Part 9 of the Commission’s Regulations, within 30 days of service; and

(9) A statement that any person aggrieved by the action may petition the Commission for a stay

pursuant to Part 9 of the Commission’s Regulations, within 10 days of service.

RULE 9.7 REPRESENTATION BY COUNSEL

A Member who is a subject of any proceedings under this Chapter has the right to retain and be

represented by counsel during such proceedings.

RULE 9.8 REPORTING VIOLATIONS TO THE COMMISSION

(a) Whenever Kalshi suspends, expels, fines or otherwise disciplines or denies any Person access to the

Platform, Kalshi will make the disclosures required by Commission Regulations.

(b) Kalshi will submit to the Commission a schedule listing all those Company Rule violations which

constitute disciplinary offenses as defined in paragraph (a)(6)(i) of CFTC Regulation 1.63 and, to the

extent necessary to reflect revisions, will submit an amended schedule within thirty days of the end of

each calendar year. Kalshi will maintain the schedule required by this section and post the schedule

on Kalshi’s website.

(c) Kalshi will submit to the Commission within thirty days of the end of each calendar year a certified

list of any Members or Persons who have been removed from any Disciplinary Panel, the Board or

any Company committee pursuant to these Rules or Applicable Law during the prior year.

(d) Whenever Kalshi finds by final decision that a Member or Person has violated a Rule or otherwise

committed a disciplinary offense and such finding makes such person ineligible to serve on Kalshi’s

Disciplinary Panels, Company committees, or the Board, Kalshi shall inform the Commission of such

finding and the length of the ineligibility in a notice it is required to provide to the Commission

pursuant to either CEA Section 17(h)(1) or CFTC Regulation 9.11.

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CHAPTER 10 - ARBITRATION

RULE 10.1 GENERAL

(a) If so elected by a Member, any Claim by the Member against a Member (including any related

counterclaims) shall be settled by arbitration in accordance with this Chapter 10.

(b) A Claim brought pursuant to this Rule 10.1 shall be adjudicated by qualified arbitrators appointed in

accordance with Rule 10.5 below.

(c) Persons to a dispute resolved in accordance with this Chapter 10 shall have the right to retain and be

represented by legal counsel or any other representation of its choosing, except any Director or a

member of the Disciplinary Panel or person substantially related to the underlying investigations,

such as material witnesses or respondents during such proceedings. Persons to a dispute resolved in

accordance with this Chapter 10 shall be responsible for their own costs, expenses and attorneys’ fees

incurred in connection with the dispute. Notwithstanding the foregoing, the Person that prevails shall

be entitled to recover from the other party all costs, expenses and reasonable attorneys’ fees incurred

in any arbitration arising out of or relating to this Chapter 10, and in any legal action or administrative

proceeding to enforce any arbitration award or relief.

(d) Any award or relief granted by the arbitrators hereunder shall be final and binding on the parties

hereto and may be enforced by any court of competent jurisdiction.

(e) For purposes of this Chapter 10, the term “Claim” means any dispute which arises out of any Kalshi

Contract, which dispute does not require for adjudication the presence of essential witnesses or third

parties over whom Kalshi does not have jurisdiction or who are otherwise not available. The term

“Claim” does not include disputes arising from underlying commodity transactions which are not a

part of, or directly connected with, any Kalshi Contract.

RULE 10.2 FAIR AND EQUITABLE ARBITRATION PROCEDURES

(a) A Person desiring to initiate an arbitration as provided in Rule 10.1 shall file a notice of arbitration (a

“Notice”) within two years from the time the Claim arose. The Notice must set forth the name and

address of the party or parties against whom the Claim is being asserted, the nature and substance of

the Claim, the relief requested, and the factual and legal bases alleged to underlie such relief.

(b) The Notice shall be accompanied by a non-refundable check payable to Kalshi in payment of the

arbitration fee. The amount of the fee shall be (i) $500 for a Claim requesting relief totaling less than

$5,000 in the aggregate or (ii) $1,000 for a Claim requesting relief totaling $5,000 or more in the

aggregate.

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(c) Upon receipt, Kalshi shall promptly convene an arbitration panel in accordance with Rule 10.5.

Kalshi shall deliver a copy of the Notice to each other party and to the arbitration panel.

(d) Within 20 days following the delivery of the Notice, each respondent shall file a written response (a

“Response”) with Kalshi, with a copy to the claimant, setting forth its or his position and any

counterclaims, as applicable. If the Response sets forth one or more counterclaims, the claimant shall

file within 20 days a written reply to such counterclaims with the Company, with a copy to the

claimant.

(e) Once each party has had an opportunity to respond to the Claim and all counterclaims, the arbitration

panel shall promptly schedule a hearing. Notwithstanding, Claims requesting relief totaling less than

$5,000 in the aggregate may, in the interests of efficiency and economy, be resolved without hearing.

(f) The chairman of the arbitration panel shall preside over the hearing and shall make such

determinations on the relevancy and procedure as will promote a fair and expeditious adjudication.

(g) The arbitration panel shall consider all relevant, probative testimony and documents submitted by the

parties. The arbitration panel shall not be bound by the formal rules of evidence.

(h) The final decision of the panel shall be by majority vote of the arbitrators, as applicable.

(i) Within 60 days after the termination of the hearing, the arbitration panel shall render its final decision

in writing and deliver a copy thereof either in person or by first-class mail to each of the parties. The

arbitration panel may grant any remedy or relief which it deems just and equitable, including, without

limitation, the awarding of interest and the arbitration fee.

(j) The final decision of the arbitration panel shall not be subject to appeal within Kalshi.

(k) No verbatim record shall be made of the proceedings, unless requested by a party who shall bear the

cost of such record.

RULE 10.3 WITHDRAWAL OF ARBITRATION CLAIM

Any Notice may be withdrawn at any time before the Response is filed in accordance with this Chapter

10. If a Response has been filed, any withdrawal shall require consent of the party against which the

Claim is asserted.

RULE 10.4 PENALTIES

(a) Any failure on the part of a Member to arbitrate a dispute subject to this Chapter 10, or the

commencement by any such Member of a suit in any court prior to arbitrating a case that is required

to be arbitrated pursuant to this Chapter 10, violates these Rules and shall subject such Member to

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disciplinary proceedings pursuant to Chapter 9.

(b) The Chief Compliance Officer, in consultation with the Regulatory Oversight Committee, may

summarily suspend, pursuant to Rule 9.6, a Member that fails to timely satisfy an arbitration award

rendered in any arbitration pursuant to this Chapter 10.

RULE 10.5 ARBITRATION PANEL

(a) On an as-needed basis, Kalshi shall convene an arbitration panel to adjudicate an arbitration claim

under this Chapter 10. For a Claim requesting relief totaling less than $5,000 in the aggregate, the

arbitration panel shall consist of one individual. For a Claim requesting relief totaling $5,000 or more

in the aggregate, the arbitration panel shall consist of three individuals.

(b) Members of the arbitration panel shall be individuals that do not have a direct interest (financial,

personal or otherwise) in the matter.

(c) Any member of the arbitration panel may disqualify himself for any reason he deems appropriate.

(d) Each member of the arbitration panel shall conduct himself in a manner consistent with the American

Bar Association/American Arbitration Association's "Code of Ethics for Arbitrators in Commercial

Disputes," which Kalshi hereby adopts as its own code of ethics for arbitrators.

(e) Each member of the arbitration panel must have no less than five years’ experience in the financial

services industry, and no less than one arbitrator must have no less than five years’ experience in the

commodity futures or swap industry.

(f) In the event that members of the arbitration panel do not satisfy the requirements of this Rule 10.5,

then the Regulatory Oversight Committee may substitute a new member for the arbitration panel or

act as the arbitration panel, to the extent that the substituted member or the Regulatory Oversight

Committee, as the case may be, does not have a direct interest (financial, personal or otherwise) in the

matter.

CHAPTER 11 LIMITATION OF LIABILITY; TIME PERIOD IN WHICH

TO BRING ACTIONS; GOVERNING LAW

RULE 11.1 PROPERTY RIGHTS

(a) Each Member hereby acknowledges and agrees that KalshiEX LLC owns and shall retain all right,

title and interest in and to Kalshi, all components thereof, including, without limitation, all related

applications, all application programming interfaces, user interface designs, software and source code

and any and all intellectual property rights therein, including, without limitation, all registered or

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unregistered, as applicable, copyright, trademark, service mark, trade secret, trade name, data or

database rights, design rights, moral rights, inventions, whether or not capable of protection by patent

or registration, rights in commercial information or technical information, including know-how,

research and development data and manufacturing methods, patent, and other intellectual property

and ownership rights, including applications for the grant of any of the same, in or to Kalshi and all

other related proprietary rights of Kalshi and/or any of its Affiliates (together, with any and all

enhancements, corrections, bug fixes, updates and other modifications to any of the foregoing and any

and all data or information of any kind, other than Proprietary Data and Personal Information,

transmitted by means of any of the foregoing, including, without limitation, market data, the

“Proprietary Information”). Each Member further acknowledges and agrees that the Proprietary

Information is the exclusive, valuable and confidential property of Kalshi. Each Member

acknowledges and agrees that it shall not reverse engineer, copy, bug fix, correct, update, transfer,

reproduce, republish, broadcast, create derivative works based on or otherwise modify, in any

manner, all or any part of Kalshi or the Proprietary Information. Each Member further agrees to keep

the Proprietary Information confidential and not to transfer, rent, lease, copy, loan, sell or distribute,

directly or indirectly, all or any portion of the Company or any Proprietary Information.

(b) Subject to the provisions of this Rule 11.1, each Member hereby acknowledges and agrees that Kalshi

is the owner of all rights, title and interest in and to all intellectual property and other proprietary

rights (including all copyright, patent, trademark or trade secret rights) in market data, and all

derivative works based thereon, and further agree not to distribute, create derivative works based on,

or otherwise use or commercially exploit market data and any such derivative works, provided that

Members may use market data for their own internal business purposes. Without limiting the

generality of the foregoing, Members may not distribute, sell or retransmit market data exchange to

any third party.

(c) Notwithstanding any other provision of this Rule 11.1, each Members retains such rights as it may

enjoy under applicable law with respect to market data solely in the form such market data was

submitted to Kalshi by such Member.

(d) Transaction data shall not be disclosed publicly other than on an aggregated or anonymous basis, or in

a manner that does not directly or indirectly identify any Member who has submitted such data.

(e) Kalshi shall not condition access to the Company upon a Member’s consent to the use of Proprietary

Data and Personal Information for business or marketing purposes. Proprietary Data and Personal

Information may not be used by the Company for business and marketing purposes unless the

Member has clearly consented to the use of Proprietary Data and Personal Information in such

manner. Kalshi, where necessary, for regulatory purposes, may share Proprietary Data and Personal

Information with one or more Designated Contract Markets or Derivative Clearing Organizations.

Nothing in this Rule shall preclude Kalshi from disclosing Proprietary Data and Personal Information:

(1) As required by Applicable Law or legal process;

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(2) As Kalshi may deem necessary or appropriate in connection with any litigation affecting the

Company;

(3) To any Company Representative authorized to receive such information within the scope of his or

her duties;

(4) To a third party performing regulatory or operational services for the Company, provided that

such party has executed a confidentiality and non-disclosure agreement in a form approved by

Kalshi;

(5) To a duly authorized representative of the CFTC lawfully requesting Proprietary Data and

Personal Information;

(6) In a manner in which a Member consents to such disclosure;

(7) Pursuant to the terms of an information-sharing agreement; or

(8) As permitted by CFTC Regulations.

RULE 11.2 SIGNATURES

Rather than rely on an original signature, Kalshi may elect to rely on a signature that is transmitted,

recorded or stored by any electronic, optical, or similar means (including but not limited to telecopy,

imaging, photocopying, electronic mail, electronic data interchange, telegram, or telex) as if it were (and

the signature shall be considered and have the same effect as) a valid and binding original.

RULE 11.3 LIMITATION OF LIABILITY

(a) EACH MEMBER OF KALSHI AGREES THAT NEITHER KALSHI NOR ITS OFFICERS,

DIRECTORS, AGENTS, EMPLOYEES, AND/OR SOFTWARE, HARDWARE, AND SERVICE

PROVIDERS (COLLECTIVELY REFERRED TO AS “KALSHI PARTIES”) SHALL HAVE ANY

RESPONSIBILITY FOR COMPLIANCE BY MEMBER WITH ANY LAW OR REGULATION

GOVERNING MEMBER’S CONDUCT. MOREOVER, EACH MEMBER OF KALSHI ALSO

AGREES THAT NO KALSHI PARTY SHALL BE LIABLE IN ANY MANNER WHATSOEVER

FOR ANY LOSS OR DAMAGE SUSTAINED BY MEMBER, INCLUDING ANY

CONSEQUENTIAL LOSS, LOSS OF PROFIT OR LOSS OF TRADING OPPORTUNITY, AS A

RESULT OF ANY ACTUAL OR PROPOSED TRANSACTIONS OR AS A DIRECT OR

INDIRECT RESULT OF ANY SERVICES PROVIDED BY KALSHI PARTIES (INCLUDING,

WITHOUT LIMITATION, ANY FAILURE IN KALSHI’S SYSTEMS OR ANY INACCURATE

INFORMATION PROVIDED BY A KALSHI PARTY), UNLESS THE RELEVANT KALSHI

PARTY IS DETERMINED BY FINAL RULING OF AN ARBITRATION PROCEEDING TO

HAVE ACTED OR FAILED TO ACT IN A MANNER THAT IS GROSSLY NEGLIGENT,

RECKLESS, OR FRAUDULENT. FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS

RULE IS INTENDED TO LIMIT THE LIABILITY OF ANY PERSON AS MAY BE PROVIDED

IN THE CEA, THE REGULATIONS OF THE COMMISSION, OR BY ACTS OF WILLFUL OR

WANTON MISCONDUCT OR FRAUD.

(b) EACH MEMBER OF KALSHI AGREES THAT IT MAY NOT BRING ANY ACTION AGAINST

A KALSHI PARTY UNLESS IT BRINGS SUCH ACTION WITHIN 2 YEARS OF THE FIRST

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OCCURRENCE OR LACK OF OCCURRENCE OF THE ACT OR OMISSION COMPLAINED

OF.

(c) EACH MEMBER OF KALSHI AGREES THAT ANY ACTION IT BRINGS AGAINST A KALSHI

PARTY WILL BE GOVERNED BY NEW YORK LAW, WITHOUT REGARD TO STATUTES,

PRECEDENT, LEGAL DOCTRINE, OR CONTRACTUAL PROVISIONS THAT WOULD

REQUIRE THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION.

(d) EACH MEMBER OF KALSHI AGREES THAT ANY ACTION IT BRINGS AGAINST A KALSHI

PARTY OR AGAINST ANOTHER KALSHI MEMBER WILL BE RESOLVED BY BINDING

ARBITRATION, IN ACCORDANCE WITH THE RULES OF THIS CHAPTER AND OTHER

RULES OF KALSHI, IF APPLICABLE.

CHAPTER 12 COMMISSION REGULATIONS THAT HAVE BEEN

ADAPTED TO BE PART OF THE RULES

The following Rules are adaptations of regulations adopted by the Commission. They must be followed

by Members and Kalshi itself, and any violation of these regulations will be a punishable violation of the

Rules.

RULE 12.1 ACTIVITIES OF SELF-REGULATORY ORGANIZATION EMPLOYEES

AND GOVERNING MEMBERS WHO POSSESS MATERIAL, NON-PUBLIC

INFORMATION (ADAPTED FROM COMMISSION REGULATION 1.59)

(a) Employees of self-regulatory organizations; Self-regulatory organization rules.

(1) Employees of Kalshi are prohibited from:

(i) Trading, directly or indirectly, in any commodity interest traded on Kalshi;

(ii) Trading directly or indirectly in any commodity interest traded on or cleared by a contract

market, swap execution facility, or clearing organization other than Kalshi and in any

commodity interest traded on or cleared by a linked exchange if the employee has access to

material non-public information concerning such commodity interest.

(2) Employees of Kalshi are prohibited from disclosing to any other person any material, non-public

information which such employee obtains as a result of his or her employment at Kalshi where

such employee has or should have a reasonable expectation that the information disclosed may

assist another person in trading any commodity interest; however, this Rule does not prohibit

disclosures made in the course of an employee’s duties, or disclosures made to another

self-regulatory organization, linked exchange, court of competent jurisdiction or representative of

any agency or department of the federal or state government acting in his or her official capacity.

(b) Members of Kalshi’s governing boards and committees and Kalshi consultants; Kalshi’s Rules. No

member of Kalshi’s governing board or of a committee of Kalshi and no Kalshi consultant shall use

or disclose, for any purpose other than the performance of such person’s official duties as a governing

48
board or committee member or consultant, material, non-public information obtained as a result of

such person’s official duties.

(c) Prohibited conduct.

(1) No person who is an employee of, a member of the governing board of, or a member of any

committee of, or a consultant of Kalshi shall:

(i) Trade for such person’s own account, or for or on behalf of any other account, in any

commodity interest on the basis of any material, non-public information obtained through

special access related to the performance of such person’s official duties as an employee,

board or committee member, or consultant; or

(ii) Disclose for any purpose inconsistent with the performance of such person’s official duties

as an employee, board or committee member, or consultant, any material, non-public

information obtained through special access related to the performance of such duties.

(2) No person shall trade for such person’s own account, or for or on behalf of any account, in any

commodity interest, on the basis of any material, non-public information that such person knows

was obtained in violation of paragraph (c)(1) from an employee of, a member of the governing

board of, a member of any committee, or a consultant of a self-regulatory organization.

RULE 12.2 SERVICE ON SELF-REGULATORY ORGANIZATION GOVERNING

BOARDS OR COMMITTEES BY PERSONS WITH DISCIPLINARY HISTORIES

(ADAPTED FROM COMMISSION REGULATION 1.63)

(a) A person is ineligible to serve on any Kalshi disciplinary committees, arbitration panels, oversight

panels or governing board if that person:

(1) Was found within the prior three years by a final decision of a self-regulatory organization, an

administrative law judge, a court of competent jurisdiction or the Commission to have committed

a disciplinary offense;

(2) Entered into a settlement agreement within the prior three years in which any of the findings or,

in the absence of such findings, any of the acts charged included a disciplinary offense;

(3) Currently is suspended from trading on any contract market, is suspended or expelled from

membership with any self-regulatory organization, is serving any sentence of probation or owes

any portion of a fine imposed pursuant to either:

(i) A finding by a final decision of a self-regulatory organization, an administrative law judge,

a court of competent jurisdiction or the Commission that such person committed a

disciplinary offense; or

(ii) A settlement agreement in which any of the findings or, in the absence of such findings,

any of the acts charged included a disciplinary offense.

(4) Currently is subject to an agreement with the Commission or any self-regulatory organization not

to apply for registration with the Commission or membership in any self-regulatory organization;

49
(5) Currently is subject to or has had imposed on him within the prior three years a Commission

registration revocation or suspension in any capacity for any reason, or has been convicted within

the prior three years of any of the felonies listed in section 8a(2)(D) (ii) through (iv) of the Act; or

(6) Currently is subject to a denial, suspension or disqualification from serving on the disciplinary

committee, arbitration panel or governing board of any self-regulatory organization as that term is

defined in section 3(a)(26) of the Securities Exchange Act of 1934.

(b) No person may serve on a disciplinary committee, arbitration panel, oversight panel or governing

board of Kalshi if such person is subject to any of the conditions listed in paragraphs (a)(1)-(6) of this

Rule.

(c) Kalshi shall submit to the Commission a schedule listing all those rule violations which constitute

disciplinary offenses and to the extent necessary to reflect revisions shall submit an amended schedule

within 30 days of the end of each calendar year. Kalshi must maintain and keep current the schedule

required by this section, post the schedule in a public place designed to provide notice to members

and otherwise ensure its availability to the general public.

(d) Kalshi shall submit to the Commission within 30 days of the end of each calendar year a certified list

of any persons who have been removed from its disciplinary committees, arbitration panels, oversight

panels or governing board pursuant to the requirements of this regulation during the prior year.

(e) Whenever Kalshi finds by final decision that a person has committed a disciplinary offense and such

finding makes such person ineligible to serve on that self-regulatory organization’s disciplinary

committees, arbitration panels, oversight panels or governing board, Kalshi shall inform the

Commission of that finding and the length of the ineligibility in any notice it is required to provide to

the Commission pursuant to either section 17(h)(1) of the Act or Commission Regulation 9.11.

RULE 12.3 VOTING BY INTERESTED MEMBERS OF SELF-REGULATORY

ORGANIZATION GOVERNING BOARDS AND VARIOUS COMMITTEES (ADAPTED

FROM COMMISSION REGULATION 1.69)

(a) Kalshi shall maintain in effect Rules that have been submitted to the Commission pursuant to Section

5c(c) of the Act and Part 40 of the Commission Regulations to address the avoidance of conflicts of

interest in the execution of its self-regulatory functions. Such Rules provide for the following:

(1) Relationship with named party in interest —

(i) Nature of relationship. A member of Kalshi’s governing board, disciplinary committee or

oversight panel must abstain from such body’s deliberations and voting on any matter

involving a named party in interest where such member:

(A) Is a named party in interest;

(B) Is an employer, employee, or fellow employee of a named party in interest;

(C) Is associated with a named party in interest through a “broker association” as defined in

Commission Regulation 156.1;

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(D) Has any other significant, ongoing business relationship with a named party in interest,

not including relationships limited to executing futures or option transactions opposite

of each other or to clearing futures or option transactions through the same clearing

member; or

(E) Has a family relationship with a named party in interest.

(ii) Disclosure of relationship. Prior to the consideration of any matter involving a named party

in interest, each member of a Kalshi governing board, disciplinary committee or oversight

panel must disclose to the appropriate Kalshi staff whether he or she has one of the

relationships listed in paragraph (a)(1)(i) of this Rule with a named party in interest.

(iii) Procedure for determination. Kalshi must establish procedures for determining whether any

member of its governing board, disciplinary committees or oversight committees is subject

to a conflicts restriction in any matter involving a named party in interest. Taking into

consideration the exigency of the committee action, such determinations should be based

upon:

(2) Financial interest in a significant action —

(i) Nature of interest. A member of a Kalshi governing board, disciplinary committee or

oversight panel must abstain from such body’s deliberations and voting on any significant

action if the member knowingly has a direct and substantial financial interest in the result

of the vote based upon either exchange or non-exchange positions that could reasonably be

expected to be affected by the action.

(ii) Disclosure of interest. Prior to the consideration of any significant action, each member of a

Kalshi governing board, disciplinary committee or oversight panel must disclose to the

appropriate Kalshi staff the position information referred to in paragraph (a)(2)(iii) of this

Rule that is known to him or her. This requirement does not apply to members who choose

to abstain from deliberations and voting on the subject significant action.

(iii) Procedure for determination. Kalshi must establish procedures for determining whether any

member of its governing board, disciplinary committees or oversight committees is subject

to a conflict restriction under this section in any significant action. Such determination must

include a review of:

(A) Gross positions held at Kalshi in the member’s personal accounts or “controlled

accounts,” as defined in Commission Regulation 1.3(j);

(B) Gross positions held at Kalshi in proprietary accounts, as defined in Commission

Regulation 1.17(b)(3), at the member’s affiliated firm;

(C) Gross positions held at Kalshi in accounts in which the member is a principal, as

defined in Commission Regulation 3.1(a);

(D) Net positions held at Kalshi in “customer” accounts, as defined in Commission

Regulation 1.17(b)(2), at the member’s affiliated firm; and

(E) Any other types of positions, whether maintained at Kalshi or elsewhere, held in the

member’s personal accounts or the proprietary accounts of the member’s affiliated firm

that the self-regulatory organization reasonably expects could be affected by the

significant action.

(iv) Bases for determination. Taking into consideration the exigency of the significant action,

such determinations should be based upon:

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(A) The most recent large trader reports and clearing records available to Kalshi;

(B) Information provided by the member with respect to positions pursuant to paragraph

(a)(2)(ii) of this Rule; and

(C) Any other source of information that is held by and reasonably available to Kalshi.

(3) Participation in deliberations.

(i) Under the Rules required by this section, a Kalshi governing board, disciplinary committee

or oversight panel may permit a member to participate in deliberations prior to a vote on a

significant action for which he or she otherwise would be required to abstain, pursuant to

paragraph (a)(2) of this Rule, if such participation would be consistent with the public

interest and the member recuses himself or herself from voting on such action.

(ii) In making a determination as to whether to permit a member to participate in deliberations

on a significant action for which he or she otherwise would be required to abstain, the

deliberating body shall consider the following factors:

(A) Whether the member’s participation in deliberations is necessary for the deliberating

body to achieve a quorum in the matter; and

(B) Whether the member has unique or special expertise, knowledge or experience in the

matter under consideration.

(iii) Prior to any determination pursuant to paragraph (a)(3)(i) of this Rule, the deliberating

body must fully consider the position information which is the basis for the member’s

direct and substantial financial interest in the result of a vote on a significant action

pursuant to paragraph (a)(2) of this Rule.

(4) Documentation of determination. Kalshi’s governing boards, disciplinary committees, and

oversight panels must reflect in their minutes or otherwise document that the conflicts

determination procedures required by this section have been followed. Such records also must

include:

(i) The names of all members who attended the meeting in person or who otherwise were

present by electronic means;

(ii) The name of any member who voluntarily recused himself or herself or was required to

abstain from deliberations and/or voting on a matter and the reason for the recusal or

abstention, if stated; and

(iii) Information on the position information that was reviewed for each member.

CHAPTER 13 TERMS OF CONTRACTS TRADED ON KALSHI

The following Rules set forth the terms of the Contracts traded on Kalshi. You should not trade any

Contract unless you are certain that you completely understand and accept its terms. Additional

information with respect to each Contract can be found on the homepage for the specific Contract.

RULE 13.1 TERMS THAT ARE UNIFORM ACROSS CONTRACTS

There are certain terms that are uniform across Contracts.

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(a) [REDACTED]

(b) All Contract prices are quoted in U.S. Dollars and cents per Contract.

(c) The minimum quote increment for each Contract is $0.01 per Contract.

(d) All Expiration Values will be posted on Kalshi’s website no later than the close of business of the

Expiration Date of a Contract.

(e) All Kalshi Contracts are deemed to be “options” as defined in 17 USC 1a(47).

(f) Halted Markets – In the event that any market irregularities are declared by the Chief Executive

Officer of Kalshi, or to prevent or reduce the potential risk of price distortions or market disruptions,

a market may be paused or halted for trading, and the Commission will be notified, if required,

pursuant to Commission Regulations. An explanation will be posted on the Kalshi Notices section of

the website within a reasonable amount of time but no later than 24 hours after the initiation of the

halt.

(g) Discretion to Refrain from Listing Contracts – Kalshi may, in its discretion, temporarily refrain from

the listing of any Contract due to the unavailability of the Underlying upon which the Contract is

based, or any other condition Kalshi determines may be detrimental to the listing of the Contract.

(h) Contract Modifications – Specifications shall be fixed as of the first day of trading of a Contract. If

any U.S. governmental agency or body issues an order, ruling, directive or law that conflicts with the

requirements of these Rules, such order, ruling, directive or law shall be construed to take precedence

and become part of these Rules, and all open and new Contracts shall be subject to such government

orders.

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