CFTC Issues Second Warning to Prediction Markets on Cookie-Cutter Self-Certifications

The US Commodity Futures Trading Commission (CFTC) has issued its second warning this year to prediction markets operators about self-certifications of events contracts. In a July 24 announcement, the agency warned against overly broad and template-style certifications that do not supply terms and conditions for each proposed permutation.

The CFTC clarified that despite ongoing policy discussions and proposed rulemaking concerning prediction markets, these markets can still certify event contracts as compliant with the Commodity Exchange Act and CFTC regulations without prior commission approval. However, this must be done in accordance with the statutory framework governing self-certification.

The agency's warning comes just days ahead of its July 27 deadline to submit comments on proposed rule amendments governing public interest determinations for certain event contracts involving the Commodity Exchange Act's enumerated activities.