Case 2:25-cv-00575-APG-BNW Document 237 Filed 11/24/25 Page 22 of 29
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7 U.S.C. § 1a(19). 9 First, the relevant portion of the excluded commodity definition requires the “occurrence, extent of an occurrence, or contingency” to be “associated with a financial, commercial, or economic consequence.” Thus, an event contract that does not satisfy the swap definition’s requirement for a potential financial consequence also does not fit within the excluded commodity definition. The CFTC has often referred to excluded commodities as intangible financial commodities, thus suggesting that the CFTC also reads the phrase “associated with” to require the event or contingency to inherently have a financial consequence. 10 Kalshi argues that 9 Kalshi and Robinhood note that the word “event” does not appear in the definition of an excluded commodity. But the word “event” also does not appear in the special rule for public interest review in 7 U.S.C. § 7a-2(c)(5)(C)(i). The special rule is not limited to swaps because it also refers to contracts, agreements, and transactions. And in the special rule, although the word “swaps” appears in the opening clause along with agreements, contracts, and transactions, it is dropped in the clause that states that the CFTC may determine that such “agreements, contracts, or transactions are contrary to the public interest if the agreements, contracts, or transactions involve” one of the enumerated subjects. No one has suggested that the CFTC cannot conduct a public interest review of swaps under the special rule even though the word was omitted in the phrase giving the CFTC the authority to conduct the public interest review. And unlike the swap definition, the excluded commodity definition does not include the word “potential” in relation to the financial consequence. All this shows is that the CEA has some drafting peculiarities that courts must interpret as best they can. 10 See, e.g. , Position Limits for Derivatives , 78 FR 75680-01, 75749 (Dec. 12, 2013) (“Initially, the Commission limited its approval of position accountability to financial instruments (i.e., excluded commodities) that had a high degree of liquidity.”); id. at 75762, n.730 (stating that the excluded commodity definition “includes financial products such as interest rates, exchange rates, currencies, securities, credit risks, and debt instruments as well as financial events or occurrences”); Position Limits for Derivatives , 81 FR 96704-01, 96742 (Dec. 30, 2016) (“In 1987, the Commission provided interpretive guidance regarding the bona fide hedging definition and risk management exemptions for futures in financial instruments (now termed excluded commodities).”); Effective Date for Swap Regulation , 76 FR 42508-01, 42511, n.27 (July 19, 2011) (“The term ‘excluded commodity’ is defined . . . to include, among other things, financial instruments such as a currency, interest rate, or exchange rate, or any economic or commercial index based on prices, rates, values, or levels that are not within the control of any party to the transaction.”); Effective Date for Swap Regulation , 76 FR 65999-01, 66000 (Oct. 25, 2011) (referring to excluded commodities as “generally, financial, energy and metals commodities”); Significant Price Discovery Contracts on Exempt Commercial Markets , 73 FR 75888-01, 75889
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