KalshiEX LLC

May 30, 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 40.2(a) Notification Regarding the Initial Listing

of the “Will <song> be the #1 song on the Billboard Hot 100 for the week of <date>?”

Contract

Dear Sir or Madam,

Pursuant to Section 5c(c) of the Commodity Exchange Act and Section 40.2(a) of the regulations of the

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

it is self-certifying the “Will <song> be the #1 song on the Billboard Hot 100 for the week of <date>?” }

contract (Contract). The Exchange intends to list the contract on a weekly basis. The Contract’s terms and

conditions (Appendix A) includes the following strike conditions:

● <song>

● <date>

Along with this letter, Kalshi submits the following documents:

● A concise explanation and analysis of the Contract;

● Certification;

● Appendix A with the Contract’s Terms and Conditions;

● Confidential Appendices with further information; and

● A request for FOIA confidential treatment.

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

Sincerely,

Xavier Sottile

Head of Markets

KalshiEX LLC

xsottile@kalshi.com

KalshiEX LLC
KalshiEX LLC

KalshiEX LLC

Official Product Name: Will <song> be the #1 song on the Billboard Hot 100 for the week of <date>?

Rulebook: TOPSONG

Kalshi Contract Category: Entertainment/Pop Culture

Top Billboard Hot 100 Song

May 30, 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 <song> be the #1 song on the Billboard Hot 100 for the week of <date>?”

Contract is a contract relating to what song is consumed (streamed, sold, played on the

radio) the most in a given week. After careful analysis, Kalshi (hereafter referred to as

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

The Billboard Hot 100 is considered the benchmark for song and album popularity in the

United States, compiling consumption across different media (such as streaming services,

physical and digital purchases, and radio airplay) to aggregate them together.

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 event

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

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

KalshiEX LLC
KalshiEX LLC

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 <song> is the #1 song on the Billboard Hot 100 for the week of <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: Xavier Sottile

Title: Head of Markets

Date: May 30, 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

KalshiEX LLC
KalshiEX LLC

APPENDIX A – CONTRACT TERMS AND CONDITIONS

Official Product Name: Will <song> be the #1 song on the Billboard for the week of

<date>?

Rulebook: TOPSONG

KalshiEX LLC
KalshiEX LLC

TOPSONG

Scope: These rules shall apply to this contract.

Underlying: The Underlying for this Contract is the number one song on the Billboard Top 100

for <date>. Revisions to the Underlying made after Expiration will not be accounted for in

determining the Expiration Value.

Instructions: The Billboard Hot 100 can be accessed here.

1 The Billboard Hot 100 measures

song consumption in a tracking week from Friday to Thursday. The chart is typically published

on Tuesdays (though the Top 10 are previewed on Monday), and states that it is for the “week of

[Saturday’s date]” which coincides with the release of Billboard magazine on Saturday. For

example, the chart released on Tuesday, February 8th, 2022, will cover consumption for the week

ending Thursday, February 3rd, 2022. This chart will be for the week of February 12th. In that

scenario, which will be the initial iteration of the Contract, <date> will refer to the 12th. 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 Billboard.

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

weekly basis. Thus, Contract iterations will be issued on a recurring basis, and future Contract

iterations will generally correspond to the next week.

<song>: Kalshi may list iterations of the Contract with <song> strikes corresponding to a piece

of music by a given artist.

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

Contract corresponding to different statistical periods of <date>.

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

include <song>.

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

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

1 https://www.billboard.com/charts/hot-100/

KalshiEX LLC
KalshiEX LLC

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

The Last Trading Time will be 11:59 PM ET.

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 date of the first

10:00 AM ET following the release of data for <date>, or two weeks after <date>.

Expiration time: The Expiration time of the Contract shall be 10:00 AM ET.

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