November 16, 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 – Volume Incentive Program: Amendment for December 2023

Dear Sir or Madam,

KalshiEX LLC (“Kalshi” or “Exchange”) hereby notifies the Commodity Futures Trading

Commission (“CFTC”) that it is amending the terms of the Volume Incentive Program

(“Program”), which was designed to encourage trading, increase volume and enhance pricing

efficiency on Kalshi. The Exchange certified the terms of the Program on 2/14/2023, which

became effective on 3/1/2023. The amendments will be effective on 12/1/2023, and remain in

effect until the earlier of 12/1/2024, or a date on which Kalshi amends or terminates the

Program.

The Exchange is making the following amendments to the Program:

● Amending the computation of Qualifying Monthly Total Dollar Volume with regard to

the prices at which qualifying volume is traded. Each $1 of volume traded at prices

above $.90 or below $.10 (i.e., given the existing terms of the Program, between $.90

and $.97 inclusive, and between $.03 and $.10 inclusive), will count only as $0.50 for

the Program. To illustrate how this works, a Program participant who buys 25,000

contracts priced at $.04 will have traded $1000, but only $500 will be counted for the

purpose of computing the participant’s Qualifying Monthly Total Dollar Volume.

Similarly, the $1000 of volume traded at that price point will count as $500 for the

purpose of the “% Dollar Rebate At Tier”.

● Additionally, we add a clause to the Program’s Scope to note that the Program applies

to all of the Exchange’s markets unless the market is specifically excluded from the

Program in the contract filing. For a contract that is excluded from the Volume

Incentive Program, a Program participant’s volume traded in that contract will not

count towards the Program participant’s Qualifying Monthly Total Dollar Volume.

These amendments to the Program reduce the scope of the Program from the original filing

and do not expand it. The reasons for making this change are to enhance the economics of the

program for the Exchange. The Exchange anticipates that the Program, as amended, will

continue to encourage volume and liquidity on the Exchange in a resource-efficient and

sustainable manner, although the change may result in a reduction of liquidity at the
aforementioned price points. Overall, a sustainable Program will result in greater liquidity on

the Exchange than if the Program did not exist, and greater liquidity on the Exchange benefits

all market participants.

Compliance with Core Principles

Kalshi has concluded that the amendments to the Program are not inconsistent with the CEA

and the CFTC’s regulations. The following Core Principles most directly pertain to the

Program: Core Principle 2 - Compliance with Rules; Core Principle 3 - Contracts not

Readily Susceptible to Manipulation; Core Principle 4 - Prevention of Market

Disruption; Core Principle 7 - Availability of General Information; Core Principle 9 -

Execution of Transactions; Core Principle 12 - Protection of Markets and Market

Participants; Core Principle 18 - Recordkeeping; Core Principle 21 - Financial

Resources.

Kalshi Rule 3.6(f) allows Kalshi to create programs that provide incentives to Participants that

encourage trading, and the amendments to the Program do not change this. The Program,

including as amended, does not impact Kalshi’s ability to perform its trade practice and market

surveillance obligations under the CEA. The Program, including as amended, also does not

render the Exchange’s contracts readily susceptible to manipulation. Chapter 5 of Kalshi’s

Rulebook includes prohibitions against fraudulent, non-competitive, unfair or abusive

practices, all of which apply to trading under the Program, including as amended. Kalshi staff

will continue to monitor for manipulative trading, market abuse and other trading violations,

including trading by participants in the Program. Additionally, Kalshi’s systems will continue

to track Program participants’ volume to ensure proper distribution of earned incentives. The

effective terms of the Program will be posted on the Exchange’s website and publicly

available. The Program, including as amended, does not impact the Exchange’s order

execution. The eligibility criteria for the amended Program are set forth in Appendix A, and are

non-discriminatory and are designed to encourage wide participation in the Program amongst

Kalshi’s members. The increased volume and liquidity encouraged by the Program will

enhance the competitiveness and efficiency of the market, and although the amendments may

potentially reduce some of the enhanced liquidity, it will make the Program more sustainable,

leading to an overall increase in liquidity relative to the state without the Program. Notification

of the filing is posted to Kalshi’s website. The terms of all Program iterations will be posted on

the Exchange’s website prior to implementation. Kalshi will keep records of participation in

the Program. Finally, the Program, including as amended, will not negatively impact Kalshi’s

satisfaction of the financial resources requirements, and the amendments are intended to

increase the financial soundness and sustainability of the Program.

Kalshi accordingly certifies that the program as amended continues to comply with the

requirements of the Commodity Exchange Act and the rules and regulations promulgated

thereunder, and certifies that, concurrent with this filing, a copy of this submission was posted

on the Kalshi website and may be accessed at: https://kalshi.com/regulatory/notices.

Several members of the Exchange expressed opposition to the changes. The opposing view

was:
● Two members stated opposition to proposed change to the computation of Qualifying

Monthly Total Dollar Volume because they currently employ trading strategies that

involve trading at prices above $.90 and below $.10 and the amendment would impact

the efficacy of their strategy.

While the Exchange understands this viewpoint, the Exchange has nonetheless determined

that the proposed changes will enhance the sustainability of the Program by improving the

Program’s economics. Overall, a sustainable Program will result in greater liquidity on the

Exchange than if the Program did not exist, and greater liquidity on the Exchange benefits all

market participants.

Attached to this cover letter is a clean copy of the updated Program terms (Appendix A) as

well as a “tracked changes” version showing the amendments (Appendix B), and a

confidential analysis of the amendments (Appendix C) for which the Exchange requests

confidential treatment pursuant to Parts 40.8 and 145.9 of the Commission’s Regulations.

If you have any questions or comments or require further information, please do not hesitate to

contact me.

Sincerely,

Elie Mishory

Chief Regulatory Officer

KalshiEX LLC

emishory@kalshi.com

Enclosures:

Appendix A - clean copy of the updated Program terms

Appendix B - “tracked changes” version showing the amendment to the Program terms

Appendix C - Confidential analysis
Appendix A - Program Terms and Conditions

Program Purpose

The purpose of this Program is to increase volume and liquidity on the central limit order book

and enhance pricing efficiency. More volume and liquidity on the central limit order book and

more efficient pricing benefit all participants in the marketplace.

Program Scope and Duration

The program applies to all Kalshi markets, unless the market is specifically excluded from

Program in the contract filing. The Program will be effective December 1, 2023, and continue

until the earlier of December 1, 2024, or the date that Kalshi amends or terminates the Program.

Eligible Participants

All Kalshi members are eligible to participate in the Program, however, affiliates of Kalshi are

not eligible to participate in the Program.

Program Terms

● Obligations:

In order to be eligible to receive the incentives, participants must meet predetermined trading

volume thresholds.

● Incentives:

Participants that satisfy the obligations will receive incentives according to the following

schedule:

Tiers

Qualifying Monthly Total

Dollar Volume % Dollar Rebate At Tier

Tier 1 $50,000 0.625%

Tier 2 $100,000 0.875%

Tier 3 $250,000 1.000%

Tier 4 $500,000 1.125%

Tier 5 $1,250,000 1.400%

Qualifying Total Monthly Dollar Volume is all of the participant’s trades during a given month

that are executed on the central limit order book at prices between $.03 and $.97.
Limit on the incentive amount (“Cap”): the maximum rebate under the Program is capped at

$25,000.

Special rule for volume in an annual series1 of the “Will $INX close <above/below/between>

<value> on <date>?” contract and the annual series2 of the “Will the Nasdaq-100 close

<date> <above/below/between> <value>?” contract:3 Each $1 of volume (between $.03 and

$.97) on these contract series will only count as $0.80 for the Program. To illustrate, a Program

participant who does $100 of volume in an INXY contract will have $80 for the purpose of

computing the participant’s Qualifying Monthly Total Dollar Volume, not $100. Similarly, the

$100 of volume in the INXY contract will count as $80 for the purpose of the “% Dollar Rebate

At Tier”.

Special rule for volume traded at prices above $.90 or below $.10. Each $1 of volume traded at

prices above $.90 or below $.10 (i.e. between $.03 and $.09 inclusive or between $.91 and $.97

inclusive for the purpose of the Program) will only count as $0.50 for the program. To illustrate,

a Program participant who buys $1,000 in contracts at a price of $.04 will have $500 for the

purpose of computing Qualifying Monthly Total Dollar Volume, not $1,000. Similarly, the

$1,000 will count as $500 for the purpose of the “% Dollar Rebate At Tier”.

Price

Qualifying

Monthly Volume

Counted Per $1

Traded

Above

$.90

$0.50

$.10 to

$.90

inclusive

$1

Below

$.10

$0.50

Note: all trading is subject to the rules in Kalshi's Rulebook Chapter 5.13, among other

relevant Federal laws and regulations.

Monitoring and Termination of Status

3 S&P 500 is a registered mark of Standard & Poor’s Financial Services, LLC. Kalshi is not affiliated with Standard

& Poor’s and it, nor its affiliates, sponsor or endorse Kalshi or its products in any way. In particular, the Kalshi

Contracts are not sponsored, endorsed, sold or promoted by Standard & Poor’s. NASDAQ-100 is a registered mark

of Nasdaq, Inc. Kalshi is not affiliated with Nasdaq and neither Nasdaq, nor its affiliates, sponsor or endorse Kalshi

or its products in any way. In particular, the Kalshi Contracts are not sponsored, endorsed, sold or promoted by

Nasdaq.

2 The ticker for contracts in this series begins with NASDAQ100Y.

1 The ticker for contracts in this series begins with INXY, as well as the INXD-24DEC31 contract.
Kalshi shall monitor trading activity and participants’ performance and shall retain the right to

revoke participant status if Kalshi’s Chief Regulatory Officer concludes from review that a

participant’s participation in the program is abusive or in any way inconsistent with the purpose

of the Program.

Kalshi may end the Program at any time.
Appendix B - Program Terms and Conditions

[strikethroughs represent deletions and green text represents additions]

Program Purpose

The purpose of this Program is to increase volume and liquidity on the central limit order book

and enhance pricing efficiency. More volume and liquidity on the central limit order book and

more efficient pricing benefit all participants in the marketplace.

Program Scope and Duration

The program applies to all Kalshi markets , unless the market is specifically excluded from the

Program in the contract filing. The Program will be effective December 1, 2023, and continue

until the earlier of December 1, 2024, or the date that Kalshi amends or terminates the Program.

Eligible Participants

All Kalshi members are eligible to participate in the Program, however, affiliates of Kalshi are

not eligible to participate in the Program.

Program Terms

● Obligations:

In order to be eligible to receive the incentives, participants must meet predetermined trading

volume thresholds.

● Incentives:

Participants that satisfy the obligations will receive incentives according to the following

schedule:

Tiers

Qualifying Monthly Total

Dollar Volume % Dollar Rebate At Tier

Tier 1 $50,000 0.625%

Tier 2 $100,000 0.875%

Tier 3 $250,000 1.000%

Tier 4 $500,000 1.125%

Tier 5 $1,250,000 1.400%
Qualifying Total Monthly Dollar Volume is all of the participant’s trades during a given month

that are executed on the central limit order book at prices between $.03 and $.97.

Limit on the incentive amount (“Cap”): the maximum rebate under the Program is capped at

$25,000.

Special rule for volume in an annual series4 of the “Will $INX close <above/below/between>

<value> on <date>?” contract and the annual series5 of the “Will the Nasdaq-100 close

<date> <above/below/between> <value>?” contract:6 Each $1 of volume (between $.03 and

$.97) on these contract series will only count as $0.80 for the Program. To illustrate, a Program

participant who does $100 of volume in an INXY contract will have $80 for the purpose of

computing the participant’s Qualifying Monthly Total Dollar Volume, not $100. Similarly, the

$100 of volume in the INXY contract will count as $80 for the purpose of the “% Dollar Rebate

At Tier”.

Special rule for volume traded at prices above $.90 or below $.10. Each $1 of volume traded at

prices above $.90 or below $.10 (i.e. between $.03 and $.09 inclusive or between $.91 and $.97

inclusive for the purpose of the Program) will only count as $0.50 for the program. To illustrate,

a Program participant who buys $1,000 in contracts at a price of $.04 will have $500 for the

purpose of computing Qualifying Monthly Total Dollar Volume, not $1,000. Similarly, the

$1,000 will count as $500 for the purpose of the “% Dollar Rebate At Tier”.

Price

Qualifying

Monthly Volume

Counted Per $1

Traded

Above

$.90

$0.50

$.10 to

$.90

inclusive

$1

Below

$.10

$0.50

Note: all trading is subject to the rules in Kalshi's Rulebook Chapter 5.13, among other

relevant Federal laws and regulations.

6 S&P 500 is a registered mark of Standard & Poor’s Financial Services, LLC. Kalshi is not affiliated with Standard

& Poor’s and it, nor its affiliates, sponsor or endorse Kalshi or its products in any way. In particular, the Kalshi

Contracts are not sponsored, endorsed, sold or promoted by Standard & Poor’s. NASDAQ-100 is a registered mark

of Nasdaq, Inc. Kalshi is not affiliated with Nasdaq and neither Nasdaq, nor its affiliates, sponsor or endorse Kalshi

or its products in any way. In particular, the Kalshi Contracts are not sponsored, endorsed, sold or promoted by

Nasdaq.

5 The ticker for contracts in this series begins with NASDAQ100Y.

4 The ticker for contracts in this series begins with INXY, as well as the INXD-24DEC31 contract.
Monitoring and Termination of Status

Kalshi shall monitor trading activity and participants’ performance and shall retain the right to

revoke participant status if Kalshi’s Chief Regulatory Officer concludes from review that a

participant’s participation in the program is abusive or in any way inconsistent with the purpose

of the Program.

Kalshi may end the Program at any time.