approval for new contracts, to ensure compliance. 7 U.S.C. § 7a-2(c)(4)(A); 17 C.F.R. § 40.3(a); see also Kalshi D.D.C. , 2024 WL 4164694, at *2. But it is not required to do so. Rather, as amended in 2000, the CEA permits DCMs to self -certify that their contracts comply with the CEA and applicable regulations “and start trading the contracts the following business day.” Kalshi D.C. Cir. , 119 F.4th at 61 (citing 7 U.S.C. § 7a-2(c)(1), 17 C.F.R. § 40.2). In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd- Frank”), PL 111-203, 124 Stat. 1376 (July 21, 2010), amended the CEA in two ways relevant here. First , while the CEA historically regulated derivatives known as futures and options , Congress amended the CEA to grant the CFTC exclusive jurisdiction over the regulation of swaps , as well. Accord United States v. Phillips , 155 F.4th 102, 112–13 (2d Cir. 2025). The CEA now grants the CFTC “exclusive jurisdiction . . . with respect to accounts, agreements . . . , and transactions involving swaps.” 7 U.S.C. § 2(a)(1)(A); see also Kalshi D. Md. , 793 F. Supp. 3d at 672 (citing 7 U.S.C. § 2(a)(1)(A)). Under the CEA, a “swap” is, among other things: any agreement, contract, or transaction . . . that provides for any purchase, sale, payment, or delivery . . . that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence. 7 U.S.C. § 1a(47)(A), (A)(ii). 5 As the Second Circuit has explained, “[c]ontrary to futures and traditional options, which contemplate delivery of or performance related to a commodity at some future time, swaps are ‘pure financial instrument[s] . . . based on the difference between two fluctuating values.’” Phillips , 155 F.4th at 112 (quoting Hershey v. Energy Transfer Partners , L.P. , 610 F.3d 239, 243 (5th Cir. 2010) (alteration and omission in Phillips )).
5 The definition is subject to certain exclusions, defined in 7 U.S.C. § 1a(47)(B).
6
Case 3:26-cv-00034 Document 48 Filed 02/19/26 Page 6 of 25 PageID #: 874
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