Commodity Futures Trading Commission issues prediction markets advisory on listing event contracts by designated contract markets

The Commodity Futures Trading Commission’s Division of Market Oversight issued an advisory on prediction markets focused on the listing for trading of event contracts by designated contract markets (DCMs). The advisory frames the rapid growth of prediction markets as an opportunity for innovation while reiterating that DCMs remain responsible for meeting Commodity Exchange Act (CEA) and Commission regulatory requirements. The advisory highlights DCM obligations under CEA section 5(d) and Part 38, including DCM Core Principle 3 and the Appendix C guidance, and restates product submission requirements. It also discusses nuances that may be particularly relevant for sports-related event contracts and calls on DCMs, as front-line regulators, to take proactive steps to ensure market evolution remains compliant with the CEA and Commission regulations.