The U.S. Commodity Futures Trading Commission has issued a second warning to prediction-market operators this year over broad, template-style self-certifications for event contracts. The agency warned that such certifications cannot replace contract-specific terms, analysis, and compliance reviews, proposing a three-step public-interest review for certain contracts. Exchanges must provide detailed information for each contract they plan to list. Exchanges can still list event contracts through self-certification, but filings must include enough product-level detail for staff review. The warning follows a March advisory and aims to prevent broad certifications that lack specific contract details. The agency’s proposed rule would create a three-step review process for contracts tied to specific activities, including terrorism, war, and gaming. The warning comes amid a significant increase in event contracts listed on registered exchanges, emphasizing the need for detailed submissions to assess contract terms, settlement rules, and compliance with regulations.
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