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CFTC Issues Guidance and Draft Rules for Prediction Markets

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The U.S. Commodity Futures Trading Commission (CFTC) has issued guidance and draft rules for prediction markets, including event contracts related to sports and other activities. The CFTC promotes innovation in liquidity and crypto markets while requiring compliance with the Commodity Exchange Act, CFTC rules, and DCM regulations. Regulators are advised to ensure adherence to CEA Section 5(d), Part 38, Core Principle 3, and Appendix C. The guidance seeks to balance market development with CFTC compliance.

Odaily Planet Daily report: The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight has issued guidance and preliminary rules regarding the listing and trading of event contracts. The announcement notes that as prediction markets rapidly evolve, the CFTC encourages innovation and growth while reminding Designated Contract Markets (DCMs) to comply with the Commodity Exchange Act (CEA) and Commission regulations, including CEA Section 5(d), Part 38, DCM Core Principle 3, Appendix C guidance, and product submission requirements. The guidance particularly highlights specific applicability details for sports-related event contracts and calls on frontline regulators to take proactive measures to ensure market compliance alongside innovation.

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