KalshiEX LLC

KalshiEX LLC

April 26, 2023

SUBMITTED VIA CFTC PORTAL 

Secretary of the Commission 

Office of the Secretariat 

U.S. Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street, N.W. 

Washington, D.C. 20581 

Re: KalshiEX LLC – CFTC Regulation 40.6 Notification Regarding the Amendment of 

the “Will USD/JPY be <above/below/between> <count>?” Contract

Dear Sir or Madam, 

Pursuant to Section 5c(c) of the Commodity Exchange Act and Section 40.6 of the regulations of the 

Commodity Futures Trading Commission, KalshiEX LLC (Kalshi) hereby notifies the Commission that 

it is amending the “Will USD/JPY be <above/below/between> <count>?” contract (Contract). 

This contract is a straight-forward modification to the previous “Will USD/JPY be 

<above/below/between> <count>?” contract. The changes are as follows: 

1. The Expiration Time was changed from one hour after <time> to <time>.

Along with this letter, Kalshi submitted the following documents:

● A clean copy of the amended Contract; and 

● A redline showing the changes to Appendix A, the product rules and terms and conditions of the 

contract.

If you have any questions, please do not hesitate to contact me. 

Sincerely, 

Elie Mishory

Chief Regulatory Officer 

KalshiEX LLC 

emishory@kalshi.com
KalshiEX LLC

KalshiEX LLC

KalshiEX LLC

Official Product Name: Will USD/JPY be <above/below/between> <count>?

Ticker: USDJPY

Kalshi Contract Category: Economic/Demographic Measure -- Non-U.S. Government

USD/JPY

April 26, 2023

CONCISE EXPLANATION AND ANALYSIS OF THE PRODUCT AND ITS 

COMPLIANCE WITH APPLICABLE PROVISIONS OF THE ACT, INCLUDING 

CORE PRINCIPLES AND THE COMMISSION'S REGULATIONS THEREUNDER

Pursuant to Commission Rule 40.2(a)(3)(v), the following is a concise explanation and analysis 

of the product and its compliance with the Act, including the relevant Core Principles, and the 

Commission's regulations thereunder.

I. Introduction

The “Will USD/JPY be <above/below/between> <count>?” Contract is a contract 

relating to the reported value of the U.S. dollar’s exchange rate with the Japanese yen by 

Intercontinental Exchange (“ICE”). After careful analysis, Kalshi (hereafter referred to as 

“Exchange”) has determined that the Contract complies with its vetting framework, 

which has been reviewed by the CFTC and formed part of the Exchange’s application for 

designation as a Contract Market (“DCM”) that was approved by the Commission. 

The foreign exchange rate of the U.S. dollar to the yen is a highly salient issue to 

contemporary businesses. ICE is one of the pre-eminent suppliers of public data on the 

over-the-counter spot exchange rate, critical to making business, investment, and hedging

decisions by firms and especially by retail. Modern firms produce goods and services 

with incredibly complex supply chains, often across dozens of different countries. 

USD/JPY is one of the so-called ‘majors’, a set of the most highly traded currencies. 

Further information about the Contract, including an analysis of its risk mitigation and 

price basing utility, as well as additional considerations related to the Contract, is 

included in Confidential Appendices B, C, and D.

Pursuant to Section 5c(c) of the Act and CFTC Regulations 40.2(a), the Exchange hereby 

certifies that the listing of the Contract complies with the Act and Commission 

regulations under the Act.

General Contract Terms and Conditions: The Contract operates similar to other binary 

contracts that the Exchange lists for trading. The minimum price fluctuation is $0.01 (one 
KalshiEX LLC

KalshiEX LLC

cent). Price bands will apply so that Contracts may only be listed at values of at least 

$0.01 and at most $0.99. Further, the Contract is sized with a one-dollar notional value 

and has a minimum price fluctuation of $0.01 to enable Members to match the size of the 

contracts purchased to their economic risks. The Exchange has further imposed position 

limits (defined as maximum loss exposure) of $25,000 USD on the Contract. As outlined 

in Rule 5.12 of the Rulebook, trading shall be available at all times outside of any 

maintenance windows, which will be announced in advance by the Exchange. Members 

will be charged fees in accordance with Rule 3.6 of the Rulebook. Fees are charged in 

such amounts as may be revised from time to time to be reflected on the Exchange’s 

Website. Additionally, as outlined in Rule 7.2 of the Rulebook, if any event or any 

circumstance which may have a material impact on the reliability or transparency of a 

Contract’s Source Agency or the Underlying related to the Contract arises, Kalshi retains 

the authority to designate a new Source Agency and Underlying for that Contract and to 

change any associated Contract specifications after the first day of trading. That new 

Source Agency and Underlying would be objective and verifiable. Kalshi would 

announce any such decision on its website. All instructions on how to access the 

Underlying are non-binding and are provided for convenience only and are not part of the 

binding Terms and Conditions of the Contract. They may be clarified at any time. 

Furthermore, the Contract’s payout structure is characterized by the payment of an 

absolute amount to the holder of one side of the option and no payment to the 

counterparty. During the time that trading on the Contract is open, Members are able to 

adjust their positions and trade freely. After trading on the Contract has closed, the 

Expiration Value and Market Outcome are determined. The market is then settled by the 

Exchange, and the long position holders and short position holders are paid according to 

the Market Outcome. In this case, “long position holders” refers to Members who 

purchased the “Yes” side of the Contract and “short position holders” refers to Members 

who purchased the “No” side of the Contract. If the Market Outcome is “Yes,” meaning 

that USD/JPY is <above/below/between> <count> at <time> for <date>, then the long 

position holders are paid an absolute amount proportional to the size of their position and 

the short position holders receive no payment. If the Market Outcome is “No,” then the 

short position holders are paid an absolute amount proportional to the size of their 

position and the long position holders receive no payment. Specification of the 

circumstances that would trigger a Market Outcome of “Yes” are included below in the 

section titled “Payout Criterion” in Appendix A. 
KalshiEX LLC

KalshiEX LLC

CERTIFICATIONS PURSUANT TO SECTION 5c OF THE COMMODITY 

EXCHANGE ACT, 7 U.S.C. § 7A-2 AND COMMODITY FUTURES TRADING 

COMMISSION RULE 40.2, 17 C.F.R. § 40.2

Based on the above analysis, the Exchange certifies that:

❏ The Contract complies with the Act and Commission regulations thereunder.

❏ This submission (other than those appendices for which confidential treatment has been 

requested) has been concurrently posted on the Exchange’s website at 

https://kalshi.com/regulatory/filings. 

Should you have any questions concerning the above, please contact the exchange at 

ProductFilings@kalshi.com. 

______________________

By: Eliezer Mishory

Title: Chief Regulatory Officer 

Date: April 26, 2023
KalshiEX LLC

KalshiEX LLC

Attachments:

Appendix A - Contract Terms and Conditions

Appendix B (Confidential) - Further Considerations

Appendix C (Confidential) - Source Agency

Appendix D (Confidential) - Compliance with Core Principles

Appendix E (Confidential) - Agreement with ICE Data Services
KalshiEX LLC

KalshiEX LLC

APPENDIX A – CONTRACT TERMS AND CONDITIONS

TERMS OF CONTRACTS TRADED ON KALSHI

Official Product Name: Will USD/JPY be <above/below/between> <count>?

Rulebook: USDJPY
KalshiEX LLC

KalshiEX LLC

USDJPY

Scope: These rules shall apply to this contract.

Underlying: The Underlying for this Contract is the open USD/JPY price at <time> for <date> 

according to Intercontinental Exchange (“ICE”). Revisions to the Underlying made after 

Expiration will not be accounted for in determining the Expiration Value.

Instructions: ICE’s real-time data on currency ratios can be accessed at a variety of public 

sources, including here. These instructions on how to access the Underlying are provided for 

convenience only and are not part of the binding Terms and Conditions of the Contract. They 

may be clarified at any time. 

Source Agency: The Source Agency is ICE.

Type: The type of Contract is an Event Contract.

Issuance: The Contract is based on the outcome of a recurrent data release, which is issued on a 

real-time basis. Thus, the Contract will be issued on a daily basis.

<count>: Kalshi may list iterations of the Contract with <count> at consecutive increments of 

0.00001. Due to the potential for variability in the Underlying, the Exchange may modify 

<count> levels in response to suggestions by Members. 

<date>: <date> refers to a calendar date specified by Kalshi. Kalshi may list iterations of the 

Contract corresponding to different variations of <date>. 

<time>: <time> refers to a time of day specified by Kalshi. Kalshi may list iterations of the 

Contract corresponding to different variations of <time>. <time> will be measured in Eastern 

Time (ET) and refer to a set of hours, minutes, seconds, and milliseconds.

Payout Criterion: The Payout Criterion for the Contract encompasses the Expiration Values 

that are <above/below/between> <count>. If no data is available on the Expiration Date at the 

Expiration Time, then the market resolves to No. If the value of <above/below/between> is 

“between”, then <count> shall be a pair of numbers, and an Expiration Value that is greater than 

or equal to the lower value of the percent pair and less than or equal to the greater value of the 

percent pair are encompassed in the Payout Criterion. 

Minimum Tick: The Minimum Tick size for the referred Contract shall be $0.01. 
KalshiEX LLC

KalshiEX LLC

Position Limit: The Position Limit for the $1 referred Contract shall be $25,000 per Member.

Last Trading Date: The Last Trading Date of the Contract will be <date>. The Last Trading 

Time will be <time>. 

Settlement Date: The Settlement Date of the Contract shall be no later than the day after the 

Expiration Date, unless the Market Outcome is under review pursuant to Rule 7.1.

Expiration Date: The Expiration Date of the Contract shall be the sooner of the first date that 

the data has been released or one week following <date>. 

Expiration time: The Expiration time of the Contract shall be <time>. 

Settlement Value: The Settlement Value for this Contract is $1.00.

Expiration Value: The Expiration Value is the value of the Underlying as documented by the 

Source Agency on the Expiration Date at the Expiration time. 

Contingencies: Before Settlement, Kalshi may, at its sole discretion, initiate the Market 

Outcome Review Process pursuant to Rule 6.3(c) of the Rulebook. Additionally, as outlined in 

Rule 7.2 of the Rulebook, if any event or any circumstance which may have a material impact on 

the reliability or transparency of a Contract’s Source Agency or the Underlying related to the 

Contract arises, Kalshi retains the authority to designate a new Source Agency and Underlying 

for that Contract and to change any associated Contract specifications after the first day of 

trading.
KalshiEX LLC

USDJPY

Scope: These rules shall apply to this contract.

Underlying: The Underlying for this Contract is the open USD/JPY price at <time> for <date>

according to Intercontinental Exchange (“ICE”). Revisions to the Underlying made after

Expiration will not be accounted for in determining the Expiration Value.

Instructions: ICE’s real-time data on currency ratios can be accessed at a variety of public

sources, including here. These instructions on how to access the Underlying are provided for

convenience only and are not part of the binding Terms and Conditions of the Contract. They

may be clarified at any time.

Source Agency: The Source Agency is ICE.

Type: The type of Contract is an Event Contract.

Issuance: The Contract is based on the outcome of a recurrent data release, which is issued on a

real-time basis. Thus, the Contract will be issued on a daily basis.

<count>: Kalshi may list iterations of the Contract with <count> at consecutive increments of

0.00001. Due to the potential for variability in the Underlying, the Exchange may modify

<count> levels in response to suggestions by Members.

<date>: <date> refers to a calendar date specified by Kalshi. Kalshi may list iterations of the

Contract corresponding to different variations of <date>.

<time>: <time> refers to a time of day specified by Kalshi. Kalshi may list iterations of the

Contract corresponding to different variations of <time>. <time> will be measured in Eastern

Time (ET) and refer to a set of hours, minutes, seconds, and milliseconds.

Payout Criterion: The Payout Criterion for the Contract encompasses the Expiration Values that

are <above/below/between> <count>. If no data is available on the Expiration Date at the

Expiration Time, then the market resolves to No. If the value of <above/below/between> is

“between”, then <count> shall be a pair of numbers, and an Expiration Value that is greater than

or equal to the lower value of the percent pair and less than or equal to the greater value of the

percent pair are encompassed in the Payout Criterion.

Minimum Tick: The Minimum Tick size for the referred Contract shall be $0.01.

KalshiEX LLC
KalshiEX LLC

Position Limit: The Position Limit for the $1 referred Contract shall be $25,000 per Member.

Last Trading Date: The Last Trading Date of the Contract will be <date>. The Last Trading

Time will be <time>.

Settlement Date: The Settlement Date of the Contract shall be no later than the day after the

Expiration Date, unless the Market Outcome is under review pursuant to Rule 7.1.

Expiration Date: The Expiration Date of the Contract shall be the sooner of the first date that

the data has been released or one week following <date>.

Expiration time: The Expiration time of the Contract shall be one hour after <time>.

Settlement Value: The Settlement Value for this Contract is $1.00.

Expiration Value: The Expiration Value is the value of the Underlying as documented by the

Source Agency on the Expiration Date at the Expiration time.

Contingencies: Before Settlement, Kalshi may, at its sole discretion, initiate the Market

Outcome Review Process pursuant to Rule 6.3(c) of the Rulebook. Additionally, as outlined in

Rule 7.2 of the Rulebook, if any event or any circumstance which may have a material impact on

the reliability or transparency of a Contract’s Source Agency or the Underlying related to the

Contract arises, Kalshi retains the authority to designate a new Source Agency and Underlying

for that Contract and to change any associated Contract specifications after the first day of

trading.

KalshiEX LLC