Peter D. Santori

Chief Regulatory Officer a

Chief Compliance Offic

e: peter.santori@thesmallexchange.com

Rule Self-Certification

December 12, 2023

Christopher J. Kirkpatrick

Secretary of the Commission

Commodity Futures Trading Commission

Three Lafayette Center

1155 21st Street, NW

Washington, DC 20581

Re: SMFE 2023-004: Self-Certification Pursuant to CFTC Regulation 40.6 -

Regarding Small Exchange, Inc.’s Market Maker Incentive Program

Dear Mr. Kirkpatrick:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), and

Section 40.6 of the Commission’s regulations thereunder, Small Exchange, Inc. (the

“Exchange”) submits notice to the Commission that the Exchange is launching a Market Maker

Incentive Program (“Program”) for various eligible contracts, as set forth on the attached Exhibit

A, which is attached hereto and incorporated herein by reference. The Program will become

effective on January 1, 2024, and be operative through March 31, 2024.

The purpose of the Program is to promote participation by providing an incentive to the

Exchange market makers to alleviate some of the costs associated with trading Exchange

products.

The Exchange certifies that Program complies with the requirements of the Commodities

Exchange Act (“Act”) and the rules and regulations promulgated thereunder. Specifically, the

Exchange has reviewed the core principles as set forth in the Act (“Core Principles”), and

believes that the Program complies with:

● Core Principle 2, Compliance with Rules: The Program is established pursuant to

existing Exchange Rule 315. Participants in the Program will be selected by the

Exchange using criteria as stated in Exhibit A. The Exchange will monitor

Program Participants’ volume to ensure proper distribution of earned incentive.

● Core Principle 4, Monitoring of Trading: The Program will not impact the

Exchange’s ability to perform its trade practice and market surveillance
obligations under the CEA, CFTC Regulations, and its Rules. The Exchange will

monitor trading in the Program to prevent manipulative trading and market abuse.

● Core Principle 7, Availability of General Information: The terms of the Program

have been disseminated on the Exchange’s website (www.smallexchange.com).

For further inquiry, Market Participants may contact the Exchange for more

information regarding the Program.

● Core Principle 9, Execution of Transactions: The products included in this

Program are listed for trading in the open and competitive market.

● Core Principle 12, Protection of Market Participants: The Program is subject to

the Rules of the Exchange, which include prohibitions against abusive practices,

including fraudulent, anti-competitive or unfair activity.

● Core Principle 18, Recordkeeping: All Participants in the Program must execute

a contractual agreement with the Exchange in which each participant will

expressly agree to comply with and be subject to applicable regulations and

Exchange Rules. The Program is subject to the Exchange’s record retention

policies, which comply with the CEA and CFTC Regulations.

The Program will not incentivize abusive or manipulative trading activity, and it will not

impact the Exchange’s ability to monitor trading activity and detect aberrant trade or order

activity. The Exchange rules prohibit fraudulent, manipulative or abuse trading practices, and all

Exchange Participants are required to comply with Exchange rules and relevant regulation. The

Program does not impact the Exchange’s order execution processes. Finally, the Exchange has

systems designed to track Program Participants’ quote and trade activity to ensure distribution of

incentives properly earned under the Program

The Exchange certifies the Program complies with the Act and all rules and regulations

promulgated thereunder. The Exchange is not aware of any opposing views. The Exchange also

certifies that this submission has been posted on the Exchange’s website at

www.smallexchange.com.

If you require any additional information regarding this submission, please contact the

undersigned at peter.santori@thesmallexchange.com.

Regards,

/s/ Peter D. Santori

Chief Regulatory Officer and

Chief Compliance Officer

Enclosed: Exhibit A

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