The US Commodity Futures Trading Commission (CFTC) has warned prediction market operators against using overly broad self-certification filings, signalling that exchanges must provide more detailed submissions when listing new event contracts.
In guidance issued by the agency’s Division of Market Oversight (DMO), the regulator said some designated contract markets (DCMs) have been submitting template-style certifications that group together numerous potential event contracts under a single filing. According to the CFTC, that approach makes it harder to assess whether each contract complies with federal regulations and core market integrity standards.
Under the Commodity Exchange Act, DCMs are permitted to self-certify new products instead of seeking formal approval before launch. However, exchanges remain responsible for demonstrating that every contract satisfies the CFTC’s 23 core principles, including protections against manipulation and clear, reliable settlement methods.
The DMO said blanket certifications can obscure important differences between contracts that rely on separate settlement sources, methodologies or event structures. As a result, exchanges should avoid submitting generic templates covering a wide range of unrelated markets.
Instead, the advisory explains that contracts may only be grouped together when they are closely related and share the same settlement framework and compliance analysis. For example, multiple markets tied to matches within the same FIFA World Cup tournament could potentially be certified as a single class, while contracts covering different sporting competitions or unrelated events should generally be filed separately.
The regulator noted that existing rules allowing broader certifications were introduced in 2011, when the derivatives market was dominated by standardised interest-rate swap products. The rapid expansion of prediction markets into sports, politics, entertainment and other real-world events has created far more diverse contract types, requiring greater individual scrutiny.
Although the advisory is not legally binding and reflects the views of the Division of Market Oversight rather than the full Commission, it provides a clear indication of how CFTC staff intend to review future submissions. Exchanges that fail to provide sufficient information risk delays or additional regulatory questions before contracts can be listed.
The guidance arrives as prediction markets continue to face heightened regulatory attention across the United States. The CFTC is simultaneously working on broader rules for event contracts while defending its federal oversight of prediction markets in ongoing legal disputes with several states over whether such products should be treated as derivatives or sports betting.