The Commodity Futures Trading Commission on Wednesday proposed new rules to strengthen oversight of so-called prediction markets, issuing a notice of proposed rulemaking that would refine how event-driven contracts are reviewed under the federal Derivatives Act.
Under the proposal, the agency would assess whether event contracts involve activities listed in the Commodity Exchange Act, including terrorism, assassination, war, gambling or illegal conduct, and whether such instruments should be considered contrary to the public interest and therefore prohibited from listing or clearing.
The rule also introduces a formal 90-day review window and sets standardized factors for evaluating contracts on a case-by-case basis.
According to the Commission, the changes are intended to improve procedural clarity and ensure consistent application of its authority as event-driven derivatives trading activity grows on CFTC-registered platforms.
CFTC Chairman Michael Selig said the framework balances innovation with clarity of enforcement.
“The CFTC will protect the integrity of our regulated markets without hindering responsible innovation,” Selig said. “This proposal gives the Commission a sustainable and transparent framework for identifying contracts. Congress has asked us to review them while allowing legitimate markets to move forward.”
