17 C.F.R. § 40.11

Review of event contracts based upon certain excluded commodities

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(a) Prohibition. A registered entity shall not list for trading or accept for clearing on or through the registered entity any of the following:

(1) An agreement, contract, transaction, or swap based upon an excluded commodity, as defined in Section 1a(19)(iv) of the Act, that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law; or

(2) An agreement, contract, transaction, or swap based upon an excluded commodity, as defined in Section 1a(19)(iv) of the Act, which involves, relates to, or references an activity that is similar to an activity enumerated in § 40.11(a)(1) of this part, and that the Commission determines, by rule or regulation, to be contrary to the public interest.

(b) [Reserved]

(c) 90-day review and approval of certain event contracts. The Commission may determine, based upon a review of the terms or conditions of a submission under § 40.2 or § 40.3, that an agreement, contract, transaction, or swap based on an excluded commodity, as defined in Section 1a(19)(iv) of the Act, which may involve, relate to, or reference an activity enumerated in § 40.11(a)(1) or § 40.11(a)(2), be subject to a 90-day review. The 90-day review shall commence from the date the Commission notifies the registered entity of a potential violation of § 40.11(a).

(1) The Commission shall request that a registered entity suspend the listing or trading of any agreement, contract, transaction, or swap based on an excluded commodity, as defined in Section 1a(19)(iv) of the Act, which may involve, relate to, or reference an activity enumerated in § 40.11(a)(1) or § 40.11(a)(2), during the Commission's 90-day review period. The Commission shall post on the Web site a notification of the intent to carry out a 90-day review.

(2) Final determination. The Commission shall issue an order approving or disapproving an agreement, contract, transaction, or swap that is subject to a 90-day review under § 40.11(c) not later than 90 days subsequent to the date that the Commission commences review, or if applicable, at the conclusion of such extended period agreed to or requested by the registered entity.

Notes of Decisions

Cited in 4 cases (4 in the last 5 years), 2023–2026 · leading case: Clarke v. CFTR, 74 F.4th 627 (5th Cir. 2023).

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Clarke v. CFTR, 74 F.4th 627 (5th Cir. 2023). “§ 7a-2(c)(5)(C)(i); 17 C.F.R. § 40.11 . 2 But the CFTC can exempt certain transactions from the CEA.”

Kalshiex LLC v. Mary Jo Flaherty (3rd Cir. 2026). · cites it 3× “The CFTC has codified this power in a regulation, 17 C.F.R. § 40.11 , but it has not yet acted to review or prohibit any sports-related event contracts.”

Kalshiex LLC v. Commodity Futures Trading Comm'n (D.D.C. 2024). · cites it 2× “17 C.F.R. § 40.11 . Pursuant to its regulations, the CFTC “may determine, based upon the review of the terms or conditions of a submission .”

An opinion was released in case 24-5205, KalshiEX LLC v. CFTC (D.C. Cir. 2024). · cites it 2× “17 C.F.R. § 40.11 (c). During this review, the Designated Market cannot list or trade the contract.”

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