CFTC Chair: Will Release Predictive Market Regulatory Guidance to Establish Clear Rules for New Event Contracts

The Wall Street Journal reports that the Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Mike Selig, stated, “Today, we are taking action by issuing clear guidelines for prediction markets to help trading platforms understand CFTC’s expectations for listing new contracts. We take responsibility for ensuring that this asset class has transparent rules.” In an interview with CNBC, Mike Selig said, “Prediction markets are a rapidly evolving field, which is why today we are taking action to release some clear guidelines to assist our trading platforms. Our trading platforms will certify contracts themselves and have their own rulebooks, and they need to clearly understand CFTC’s expectations. Therefore, we will publish these guidelines in clear language for trading platforms to follow. Additionally, later today, we will also release a pre-notice for proposed rulemaking. We intend to establish clear rules of conduct for this new asset class and new markets. It is very important to ensure that derivatives markets are free from manipulation, insider trading, and various abuses. Therefore, we will take responsibility to ensure that these new asset classes have clear rules of conduct.”