As Trading Heat Soars, CFTC Issues Advisory Opinion on Prediction Markets

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Investing.com – The U.S. Commodity Futures Trading Commission’s Market Oversight Division issued a consultation on Thursday regarding the listing and trading of event contracts in prediction markets.

The division stated that its goal is to encourage the growth and innovation of prediction markets while reminding designated contract markets of their regulatory obligations under the Commodity Exchange Act and Commission regulations.

The consultation emphasizes the regulatory obligations of designated contract markets under Section 5(d) and Part 38 of the Commodity Exchange Act, Core Principle 3 for designated contract markets, and Appendix C guidance, as well as product submission requirements. It also discusses certain nuances that may be particularly relevant to sports-related event contracts.

The division stated that as a primary regulator, designated contract markets should take proactive measures to ensure their markets continue to develop in compliance with the Commodity Exchange Act and Commission regulations.

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