Case: 3:25-cv-00698 Document #: 1 Filed: 08/20/25 Page 15 of 47
on ErisX RSBIX NFL Contracts and Certain Event Contracts (March 25, 2021) (“Quintenz Statement”). 1 53. This provision expressly empowered the CFTC, an independent federal agency created by Congress in 1974 under the “The Commodity Futures Trading Commission Act”, 7 U.S.C. § 4, to regulate financial derivative markets in accordance with the CEA, 7 U.S.C. § 1 et seq .; 17 C.F.R. § 1 et seq. , and authorized the CFTC to prohibit certain types of derivatives contracts if it finds them “contrary to the public interest,” specifically naming certain specific categories. See 7 U.S.C. § 7a-2(c)(5)(C). 54. Pursuant to this authority, in 2011, the CFTC promulgated Regulation 17 C.F.R. § 40.11, titled “Review of event contracts based upon certain excluded commodities ,” which formalized the review process for event contracts. Regulation 40.11 mirrored the substance of the statutory language and set out the procedure for the Commission to block an event contract. Subsection (a)(1) of Regulation 40.11 establishes a clear prohibition: “ A registered entity shall not list for trading or accept for clearing ” any contract “based upon an excluded commodity, as defined in [the CEA], that involves, relates to, or references terrorism, assassination, war, gaming , or an activity that is unlawful under any State or Federal law.” Id. (emphasis added). Any event contract that falls into one of those sensitive categories is thus per se barred from being listed by a registered entity. 55. Consistent with the findings and purpose of the CEA, the CFTC promulgated regulations that allow registered entities to self-certify event contracts through 17 C.F.R. § 40.2 and where self-certified products or contracts present compliance issues, the self-certifying registered entity must provide a “concise explanation and analysis that is complete” concerning “the underlying commodity,
1 https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement032521
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