23-033

November 1, 2023

VIA PORTAL

Commodity Futures Trading Commission

Attention: Christopher Kirkpatrick, Secretary

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Re: CFTC Regulation 40.6(a) Certification: Submission of Amendments to the 

Nodal Exchange Rulebook

Dear Mr. Kirkpatrick:

Nodal Exchange, LLC (“Nodal Exchange” or “Exchange”) is notifying the Commodity Futures 

Trading Commission (“CFTC” or “Commission”) that it is self-certifying amendments to the 

Nodal Exchange Rulebook (“Rules”) pursuant to Commission Regulation 40.6(a). The 

Exchange is amending Appendix C – Reporting Levels, Accountability Levels and Position 

Limits, to support times of use that are relevant for solar generation. Nodal Exchange will 

soon add monthly solar class contracts to its contract offering. In preparation for this 

contract launch, Nodal Exchange has refreshed the Deliverable Supply Analysis for existing 

contracts and aggregated 2x16 contracts with on-peak contracts. The deliverable supply 

analysis has been segregated as Exhibit B, for which confidential treatment is requested. 

The reporting levels, accountability levels, and position limits for these contracts are 

attached to this letter as Exhibit C, which will be added to the Nodal Exchange Rulebook 

Appendix C - Reporting Levels, Accountability Levels and Position Limits. The Exchange 

intends to implement the amended Rules on or after November 16, 2023.

Exchange management has assessed the amendments to the Rules, and their compliance 

with applicable provisions of the Act, including the Commissions Regulations and the Core 

Principles. Nodal Exchange has identified that the amendments may affect the following 

Core Principles as follows:

Core Principle 2 – Compliance with the Rules: Trading in the Exchange’s contracts will be 

subject to the Nodal Exchange Rulebook in Section IV, describing trading procedures, and 

Section VI, which establishes trading codes of conduct, sound trading practices, and 

identifies prohibited trading behavior and abuses. In addition, trading behavior and 

activity will be subject to extensive monitoring and surveillance by the Exchange’s Division 

of Market Administration and Surveillance. The Exchange’s Compliance Department has 
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the authority to address disciplinary matters through investigation and enforcement 

procedures in accordance with Section VII of the Exchange Rulebook.

Core Principle 3 - Contracts not Readily Susceptible to Manipulation: A description of the 

underlying cash markets and deliverable supply analysis for the Exchange’s contracts is 

provided, which demonstrates compliance that the Exchange’s contracts are not readily 

susceptible to manipulation. 

Core Principle 4 - Prevention of Market Disruption: Trading in the Exchange’s contracts will 

be subject to the Nodal Exchange Rulebook Section VI, which prohibits disruptive trading 

behavior and manipulation, subject to monitoring and surveillance by the Exchange’s 

Division of Market Administration and Surveillance.

Core Principle 5 - Position Limitations or Accountability: The spot-month speculative 

position limits for the Exchange’s contracts are set at less than 25% of the deliverable supply 

in the respective underlying market. In addition, the Exchange monitors and enforces 

position accountability rules for individual single-month and all-months combined, which 

are also within 25% of deliverable supply. The reporting levels, accountability levels and 

position limits are provided in attached Exhibit C, to be added to the Nodal Exchange 

Rulebook Appendix C – Reporting Levels, Position Accountability Levels and Position Limits.

Core Principle 7 - Availability of General Information: The Exchange will post general 

information, including the reporting levels, accountability levels, position limits, contract 

specifications, Exchange fees, and the Nodal Exchange Rulebook, on the Exchange’s website: 

www.nodalexchange.com.

Core Principle 8 - Daily publication of Trading Information: The Exchange will publish daily 

information on settlement prices, volume, open interest and opening and closing ranges for 

the Exchange’s actively traded contracts on its website.

Core Principle 9 - Execution of Transactions: The Exchange’s contracts are available on the 

Exchange’s electronic trading screen that is a central limit order book (“CLOB”). The CLOB 

provides the market with the ability to execute the Exchange’s contracts from the interaction 

of multiple bids and multiple offers within a predetermined, nondiscretionary automated 

trade matching and execution algorithm. 

Core Principle 11 – Financial Integrity of Transactions: All Nodal Contracts will continue to 

be cleared by Nodal Clear, a registered derivatives clearing organization subject to 

Commission regulation, and carried by qualified futures merchants. 

Core Principle 12 - Protection of Markets and Market Participants: Section VI of the Nodal 

Exchange Rulebook protects the market and market participants from abusive, disruptive, 

fraudulent, noncompetitive and unfair conduct and trade practices. All Nodal Contracts are 

subject to these rules that apply to all transactions in the Exchange’s contracts.
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Core Principle 13 - Disciplinary Procedures: Section VII of the Nodal Exchange Rulebook 

describes the disciplinary procedures of the Exchange that authorize the Exchange to 

discipline, suspend, or expel anyone on the Exchange that violates these rules. 

Core Principle 14 - Dispute Resolution: Section VIII of the Nodal Exchange Rulebook 

establishes rules concerning alternative dispute resolution, which provide for the resolution 

of disputes between or among Exchange users through the NFA arbitration program. Under 

Section VIII, arbitration is available for all disputes, controversies or claims among all 

Exchange users relating to Exchange activities. 

Pursuant to Section 5c(c) of the Act and the Commission’s Regulation 40.6, the Exchange 

certifies that amended Rules comply with the Act and the Commission’s Regulations 

thereunder. There have not been any opposing views expressed regarding the amendments 

to the Rules.

Nodal Exchange certifies that this submission has been concurrently posted on the Nodal 

Exchange website at www.nodalexchange.com.

If you have any question or need additional information regarding the above, please 

contact the undersigned at 703-962-9853 or markotic@nodalexchange.com or Ken 

McCracken, Chief Regulatory Officer & General Counsel at 703-962-9835 or 

mccracken@nodalexchange.com.

Sincerely,

/s/ Max Markotic

Managing Director

Attachment:

• Confidential Exhibit B: Deliverable Supply Analysis (Confidential Treatment Requested)

• Exhibit C – Reporting Levels, Accountability Levels and Position Limits - REDLINE