June 15, 2023

FOIA CONFIDENTIAL TREATMENT REQUEST

Pursuant to 17 C.F.R. § 145.9

VIA CFTC PORTAL 

Assistant Secretary of the Commission for FOI,

 Privacy and Sunshine Acts Compliance

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: Petition for Confidential Treatment

Dear Sir or Madam:

Nodal Exchange, LLC (“Nodal Exchange”) has on this date filed Submission No. 23-016 (the 

“Submission”), a CFTC Regulation 40.6 self-certification of the extension of Environmental 

Futures and Options – Broker Incentive Program and Environmental Incentive Program 9

(“Programs”), with the Secretary of the Commission. The Submission contains information, which 

is segregated from the Submission into Exhibit 1 (“Exhibit 1”), that is confidential and proprietary 

commercial and financial information of Nodal Exchange exempt from disclosure pursuant to 

Section 8 of the Commodity Exchange Act (“CEA”), the Commission Regulations, and paragraph 

(b)(4) of the Freedom of Information Act (“FOIA”) as explained below. Nodal Exchange 

respectfully requests that the Commission not release the information contained in Exhibit 1.

In accordance with the provisions of Commission Regulations 40.8, 145.5 and 145.9, Nodal 

Exchange requests confidential treatment of Exhibit 1. Confidential treatment is requested, inter 

alia, on the grounds that Exhibit 1 contains information that would separately disclose business 

transactions and trade secrets that may not be disclosed to third parties, as provided in Section 8(a) 

of the Commodity Exchange Act and Commission Regulation 145.5(c)(1). Confidential treatment 

additionally is requested on the grounds that Exhibit 1 is exempt from disclosure under paragraph 

(b)(4) of FOIA (“Exemption 4”) and Commission Regulations 145.5(d) and 145.9(d)(1)(ii) 

because it contains commercial and financial information that is confidential and would be of 

material assistance to competitors of Nodal Exchange.
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Justification of Confidential Treatment

Judicial analysis of Exemption 4 has found that there is a presumption of confidentiality for 

commercial information that is (1) provided voluntarily and (2) is of a kind the provider would not 

customarily make available to the public. See Critical Mass Energy Project v. Nuclear Regulatory 

Commission, 975 F.2d 871, 878 (D.C. Cir. 1992) (en banc); see also Center for Auto Safely v. 

National Highway Traffic Safety Administration, 244 F.3d 144, 147 (D.C. Cir. 2001) (applying 

the tests detailed in Critical Mass). Nodal Exchange provided the confidential information in 

Exhibit 1 to the Commission voluntarily in the Submission in order to demonstrate to the 

Commission the Program’s compliance with the CEA and the Commission Regulations. 

Notwithstanding the presumption of confidentiality, the confidential information in Exhibit 1

would still be considered “confidential” because Nodal Exchange would not disclose it to the 

public and its disclosure would cause substantial harm to Nodal Exchange’s competitive position. 

FOIA was enacted to facilitate the disclosure of information to the public, but was clearly not 

intended to allow business competitors to avail themselves of valuable confidential information, 

especially when “competition in business turns on the relative costs and opportunities faced by 

members of the same industry.” Worthington Compressors v. Costle, 662 F.2d 45, 51 (D.C. Cir. 

1981). In Gulf & Western Industries, Inc. v. United States, 615 F.2d 527 (D.C. Cir. 1979), the 

Court of Appeals concluded that information is confidential for purposes of FOIA if (1) it is not 

of the type normally released to the public by the submitter and (2) the information is of the type 

that would cause substantial competitive harm if released. There is no requirement that 

“competitive harm” be established by a showing of actual competitive harm. Rather, “actual 

competition and the likelihood of substantial competitive injury is all that needs to be shown.” 

Gulf & Western, 615 F.2d at 530. Thus, in National Parks and Conservation Association v. 

Kleppe, 547 F.2d 673 (D.C. Cir. 1976), the Court of Appeals concluded that the disclosure of 

certain financial information, including costs and price-related items, was likely to cause 

substantial harm to the disclosing party’s competitive position. When applying the “substantial 

competitive harm test,” courts “[c]onsider how valuable the information will be to the requesting 

competitors and how much this gain will damage the submitter.” Worthington Compressors, 662 

F.2d at 51. It is clear that the FOIA exemption was intended to prevent the fundamental unfairness 

that can result from one side having confidential information about the other in a business context. 

Cf. National Parks, 547 F.2d at 678 n.18. 

The confidential information in Exhibit 1 is valuable commercially because it took significant time 

and at substantial cost to develop an effective Program in order to create a liquid marketplace 

necessary to be competitive. The Program is an essential part of Nodal Exchange’s competitive 

strategy for its futures markets. Nodal Exchange has determined that the use of strategies similar 

to the Program is integral to sustaining competitive markets. Disclosure of the terms of the 

Program creates the potential for significant competitive harm to Nodal Exchange. Additionally, 

it should be noted that there is no regulatory requirement that such information be disclosed.

For the foregoing reasons, Nodal Exchange requests that the Commission grant this request for 

confidential treatment for Exhibit 1 and the information contained therein. Should you have any 
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questions or need additional information, please contact me at 703-962-9853 or 

markotic@nodalexchange.com

Very truly yours,

/s/ Max Markotic

Managing Director