23-031

October 18, 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 the Rules and Nodal Exchange Participant Agreement (“Agreement”)

to allow intermediated trades to be entered on its System. Pursuant to the amended Rules, 

non-Participants (referred to as “Customers”) can effectuate trades on the Exchange via an 

“FCM Participant”. The amended Rules and Agreement are attached hereto and indicate the 

specific text in red that is being amended. The Exchange intends to implement the amended 

Rules and Agreement on November 1, 2023.

An FCM Participant is a new role that Nodal Exchange has created to facilitate 

intermediated transactions. Specifically, the amended Rules will allow a registered Futures 

Commission Merchant (“FCM”) to become an “FCM Participant” so long as they are a 

Participant that meets the qualifications under amended Rule 3.21, abides by all other 

applicable Rules, and agrees to comply with additional obligations in compliance with the 

CFTC’s regulations, including, among other things, ensuring that each Customer it 

intermediates is familiar with and complies with the CFTC’s regulations and Nodal 

Exchange’s Rules. FCMs that qualify under the Rules must elect to undertake the FCM 

Participant role by executing the amended Nodal Exchange Participant Agreement to 

address FCM Participant responsibilities and obligations. 

The amended Rules refer to Persons utilizing an FCM Participant to trade Nodal Contracts 

as a Customer. Customers will not have Direct Access to the System; however, they will be 

afforded access to trade on Nodal Exchange via their FCM Participant. Customers, like any 

other Person entering an order or executing a transaction in Nodal Contracts, consent and 

become subject to the Exchange’s jurisdiction and Rules by virtue of accessing, initiating, 
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entering any Order or executing a Transaction on or subject to the Rules of the Exchange 

via an FCM Participant. 

In addition, the Exchange is amending Rule 6.8 Aggregation of Positions to provide clarity to 

market participants in accordance with CFTC Regulation 150.4(a).

Exchange management has assessed the amendments 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. The Rulebook and Agreement 

are applicable to all Persons accessing Nodal Exchange.

Core Principle 4 - Prevention of Market Disruption: All activity performed on Nodal is 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 

Surveillance.

Core Principle 5 – Position Limitations or Accountability: The amendments to Rule 6.8 

provide clarity to market participants in accordance with CFTC Regulation 150.4(a).

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

provide clarity to market participants. The amended Rules are available to market 

authorities, Participants, FCM Participants, Clearing Members, Customers, Authorized 

Brokers and the public on the Exchange website.

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. 

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 regarding alternative dispute resolution for market participants and 

market intermediaries.

Core Principle 18 – Recordkeeping: Nodal Exchange maintains records of all activities 

relating to the business of the Exchange in a form and manner acceptable to the Commission 

and for a period of at least five years.
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Core Principle 19 – Antitrust: The amendments to the Rules do not result in any 

unreasonable restraint of trade or impose any material anticompetitive burden on trading 

on Nodal Exchange.

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:

Nodal Exchange Rulebook – REDLINE

Nodal Exchange Participant Agreement - REDLINE