23-027

September 21, 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 A – Contract Specifications for the Texas Compliance 

Renewable Energy Certificate from CRS Listed Facilities Vintage 2021- 2033 Front Half and 

Back Half Options due to changes in the Texas Renewable Energy Program (“TX REP”).

The Futures contracts call for physical delivery of renewable energy certificates generated 

from renewable facilities in Texas (“TX RECs”) that may be used to satisfy compliance 

obligations under the TX REP. However, Texas House Bill 1500 (“TX HB 1500”), which was 

signed into law on June 9, 2023, removes the ability for retail power suppliers to use TX 

RECs to satisfy TX REP compliance obligations beginning September 1, 2023. TX RECs 

generated in September can be used for compliance from January to August 2023, however.

The amended Rules are attached hereto and indicate the specific text in red that is being 

amended. The Exchange intends to implement the amended Rules in ten business days.

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: The amendments to the Rules provide 

clarity and consistency with the Act for compliance with the Rules. Appendix A is applicable 

to all Nodal Exchange Participants.
23-027

Core Principle 3 – Contracts Not Readily Subject to Manipulation: The applicable TX REC 

futures contracts are not readily subject to manipulation and are based on established and 

liquid underlying cash markets. Trading of the contracts is monitored by the Exchange.

Core Principle 7 – Availability of General Information: The amendments to the Rules 

provide clarity to Exchange Participants. The amended Rules are available to market 

authorities, Participants, Authorized Brokers and the public on the Exchange website.

Core Principle 11 – Financial Integrity of Transactions: The applicable TX REC futures 

contracts will continue to be cleared by Nodal Clear, a registered derivatives clearing 

organization subject to Commission regulation, and carried by qualified futures merchants. 

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 this submission, please 

contact me at 703-962-9853 or Markotic@nodalexchange.com.

Sincerely,

/s/ Max Markotic

Managing Director

Attachment:

• Exhibit A: Nodal Exchange Appendix A - Contract Specifications REDLINE