CFTC issues second warning to prediction markets on cookie-cutter self-certifications
The CFTC issued another warning to prediction market operators, saying event contracts must be self-certified in a detailed, contract-specific way rather than through broad template filings. The agency said operators may still self-certify contracts without prior approval, but only within the limits of the Commodity Exchange Act and CFTC rules, and must provide the full terms, conditions, underlying commodity, and a concise legal/compliance analysis for each proposed contract permutation. The CFTC said generalized submissions are not acceptable, repeating guidance it issued in March. The notice came just before the comment deadline on proposed rule changes that would clarify when certain event contracts are contrary to the public interest. Those amendments would create a three-step test for contracts tied to activities such as terrorism, assassination, or gaming and could significantly affect prediction market regulation.
