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The Commodity Futures Trading Commission on Wednesday proposed new rules to tighten oversight of so-called prediction markets, issuing a Notice of Proposed Rulemaking that would refine how event contracts are reviewed under federal derivatives law.
Under the proposal, the agency would assess whether event contracts implicate activities listed in the Commodity Exchange Act, including terrorism, assassination, war, gaming, or unlawful conduct, and whether such instruments should be deemed contrary to the public interest and therefore prohibited from listing or clearing.
The rule also introduces a formal 90-day review window and lays out 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 the consistent application of its authority as trading activity in event-based derivatives expands across CFTC-registered platforms.
CFTC Chairman Michael Selig said the framework balances innovation with enforcement clarity.
“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” Selig said. “This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.”