CFTC Regulation 40.2(a) Notification Regarding the Initial Listing of the “ Will the price of coffee, per the Pyth price feed for the ICE Coffee “C” futures contract for <delivery month>, be <above/below/exactly/at least/at most/between>…

KalshiEX LLC · received by the CFTC 28 October 2026 · the filing (PDF)

Summary

Warrant Check read 5 operative provisions in this filing. Across them, 9 of 30 checks are present, 4 partial and 14 absent. 1 provision has every check present. 1 statement the exchange makes to the CFTC about the filing itself (such as that it complies with the Act) is not contract terms and is left out. 1 rule on who may trade is not a settlement term and is left out.

9 present4 partial14 absent3 not assessed

Staff-letter lens

The payout rule here is “Payout Criterion / Market Outcome determination”: the rule that says what makes the contract pay Yes or No. The other 4 rules are fallback rules: what happens if the event is cancelled or delayed, the data goes missing, or the result is challenged.

Topic the staff letters raise	Payout rule	Fallback rules
Settlement source identified	Addressed	1 of 4 addressed
Settlement method described	Addressed	0 of 4 addressed
Covers every case it applies to	Addressed	1 of 4 addressed
Timing set	Addressed	0 of 4 addressed
Terms in the public filing	In the filing	1 of 4 in the filing

How the lens works and what it does not read

What the wording addresses

Payout Criterion / Market Outcome determination — every check present.
“closing value of the one-minute candle ... is above/below/exactly/at least/at most/between”
Missing-candle fallback (stale candle substitution): Independent Verification, Defined Benchmark, Comprehensive Coverage.
“the closing value of the most recent one-minute candle ... is used”

What the wording leaves open

Missing-candle fallback (stale candle substitution) “the closing value of the most recent one-minute candle ... is used”
- Suitable Method — Partial: A candle up to 60 minutes stale is used as a proxy for the value 'at' the specified instant, which the procedure cannot establish with the precision the main clause asserts.
- Conclusive Link — Partial: Meeting the 60-minute/same-session threshold does not establish the actual value at the specified time, only a proxy for it.
- Relevant Timeline — Partial: The evidence can cover a different moment (up to 60 minutes earlier) than the obligation's stated instant.
What would close it: Narrow or remove the staleness window, or require an independent confirmation that no material price movement occurred during the gap.
Source Agency permanent discontinuation determination “Kalshi has the right to determine payouts pursuant to Rule 7.1”
- Independent Verification — Absent: No named third-party evidence of 'permanent discontinuation'; determination rests on Kalshi's own assessment.
- Suitable Method — Absent: No procedure specified for establishing permanence of discontinuation.
- Defined Benchmark — Absent: No threshold or waiting period defining 'permanently discontinues' is given.
- Comprehensive Coverage — Absent: No defined population/coverage for confirming discontinuation across the feed.
- Relevant Timeline — Absent: No defined observation period establishing permanence versus temporary outage.
- Relies on material referred to but not in the public filing.
What would close it: Include Rule 7.1's text and define an objective, time-bound, third-party-verifiable standard for 'permanent discontinuation'.
Compromised/malfunctioning candle determination “the Exchange determines that a published candle ... resulted from a compromise”
- Independent Verification — Absent: Determination is the Exchange's own judgment; no named inspector, audit, or third-party confirmation is specified.
- Suitable Method — Absent: No forensic or verification procedure is described for identifying compromise or malfunction.
- Defined Benchmark — Absent: No defined criteria or threshold for what counts as a qualifying compromise/malfunction.
- Comprehensive Coverage — Absent: No stated scope of review (e.g., which candles/time window are checked).
- Relevant Timeline — Partial: A deadline (before Expiration time) is given for the determination, but not for the evidence's own temporal coverage.
- Relies on material referred to but not in the public filing.
What would close it: Attach Rule 7.1 text and require an independent technical confirmation (e.g., Source Agency incident report) rather than sole Exchange determination.
Contingencies / Market Outcome Review Process “Kalshi may, at its sole discretion, initiate the Market Outcome Review”
- Independent Verification — Absent: Trigger is Kalshi's sole discretion, not third-party-receivable evidence.
- Suitable Method — Absent: No described procedure establishes when a value 'cannot be determined'.
- Defined Benchmark — Absent: No named threshold for invoking review.
- Comprehensive Coverage — Absent: No defined scope of what is reviewed.
- Relevant Timeline — Absent: No defined time window within which the review determination must be evidentially supported.
- Relies on material referred to but not in the public filing.
What would close it: Include Rule 7.1 text and define objective triggers and verifiable evidence for invoking review.

Every provision read

Payout Criterion / Market Outcome determination

“closing value of the one-minute candle ... is above/below/exactly/at least/at most/between”

Determination: the Expiration Value (Pyth one-minute candle closing value) satisfies the stated comparison to <value> within <time period> · Consequence: Market Outcome is fixed as Yes or No and long/short holders are paid accordingly

Present Independent Verification. Evidence is the Pyth price feed's published one-minute candle closing value from a named third-party Source Agency, not either party's opinion.

Present Suitable Method. A single defined candle value (or, for 'in' contracts, any one qualifying candle) is exactly the quantity the claim asserts; the procedure matches the claim's own definition.

Present Defined Benchmark. Numeric <value> and comparison operator (above/below/at least/etc.) are explicitly named and defined.

Present Conclusive Link. Because the claim is defined as 'closing value compared to value', satisfying the comparison is definitionally the claim.

Present Comprehensive Coverage. For 'at' contracts the single specified time is used; for 'in' contracts every candle ending within the period is covered with an explicit rule for how many qualifying candles suffice.

Present Relevant Timeline. Candle timing is tied precisely to the specified time or period via defined interval-labeling rules.

Missing-candle fallback (stale candle substitution)

“the closing value of the most recent one-minute candle ... is used”

Determination: a candle published up to 60 minutes earlier represents the value at the specified time · Consequence: that substitute value is used to determine the Expiration Value and hence the Market Outcome

Present Independent Verification. Still a Source Agency-published candle, a receivable third-party record.

Partial Suitable Method. A candle up to 60 minutes stale is used as a proxy for the value 'at' the specified instant, which the procedure cannot establish with the precision the main clause asserts.

Present Defined Benchmark. 60-minute window and same-trading-session requirement are explicitly named.

Partial Conclusive Link. Meeting the 60-minute/same-session threshold does not establish the actual value at the specified time, only a proxy for it.

Present Comprehensive Coverage. Single candle maps to the single specified time point being estimated.

Partial Relevant Timeline. The evidence can cover a different moment (up to 60 minutes earlier) than the obligation's stated instant.

Source Agency permanent discontinuation determination

“Kalshi has the right to determine payouts pursuant to Rule 7.1”

Determination: the feed has been permanently discontinued with no successor published before Expiration · Consequence: Kalshi determines payouts unilaterally under Rule 7.1

Absent Independent Verification. No named third-party evidence of 'permanent discontinuation'; determination rests on Kalshi's own assessment.

Absent Suitable Method. No procedure specified for establishing permanence of discontinuation.

Absent Defined Benchmark. No threshold or waiting period defining 'permanently discontinues' is given.

Not assessed Conclusive Link. Not assessed: no Defined Benchmark is named, so whether meeting it would settle the question cannot be judged.

Absent Comprehensive Coverage. No defined population/coverage for confirming discontinuation across the feed.

Absent Relevant Timeline. No defined observation period establishing permanence versus temporary outage.

Compromised/malfunctioning candle determination

“the Exchange determines that a published candle ... resulted from a compromise”

Determination: a published candle resulted from a systems compromise, unauthorized publication, or malfunction · Consequence: Kalshi may determine payouts under Rule 7.1 and may halt trading

Absent Independent Verification. Determination is the Exchange's own judgment; no named inspector, audit, or third-party confirmation is specified.

Absent Suitable Method. No forensic or verification procedure is described for identifying compromise or malfunction.

Absent Defined Benchmark. No defined criteria or threshold for what counts as a qualifying compromise/malfunction.

Not assessed Conclusive Link. Not assessed: no Defined Benchmark is named, so whether meeting it would settle the question cannot be judged.

Absent Comprehensive Coverage. No stated scope of review (e.g., which candles/time window are checked).

Partial Relevant Timeline. A deadline (before Expiration time) is given for the determination, but not for the evidence's own temporal coverage.

Contingencies / Market Outcome Review Process

“Kalshi may, at its sole discretion, initiate the Market Outcome Review”

Determination: the Expiration Value cannot be determined or requires review · Consequence: Kalshi determines payouts pursuant to Rule 7.1

Absent Independent Verification. Trigger is Kalshi's sole discretion, not third-party-receivable evidence.

Absent Suitable Method. No described procedure establishes when a value 'cannot be determined'.

Absent Defined Benchmark. No named threshold for invoking review.

Not assessed Conclusive Link. Not assessed: no Defined Benchmark is named, so whether meeting it would settle the question cannot be judged.

Absent Comprehensive Coverage. No defined scope of what is reviewed.

Absent Relevant Timeline. No defined time window within which the review determination must be evidentially supported.

Read 3 November 2026 with Warrant Check (instrument 1.0). Labels: Present, Partial, Absent describe whether each check is found in the wording as written. Not assessed: Conclusive Link cannot be judged where no Defined Benchmark is named; that follows from the missing benchmark and is not a separate gap.

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