Key Takeaways
The CFTC’s Division of Market Oversight issued a blanket no-action letter on Might 13, 2026, protecting all swap knowledge reporting for occasion contracts.The ruling relieves DCMs, DCOs, and their individuals from SDR reporting duties, lowering compliance prices throughout prediction market operators.New entities in search of similar aid can request inclusion within the no-action letter’s appendix, with the CFTC signaling uniform remedy going ahead.
CFTC Points Blanket No-Motion Letter Slicing SDR Reporting for Occasion Contracts
The CFTC‘s Division of Market Oversight and Division of Clearing and Threat collectively introduced the place. The 2 divisions mentioned they won’t suggest enforcement motion towards designated contract markets, derivatives clearing organizations, or their individuals for failing to report occasion contract transaction knowledge to swap knowledge repositories.
The no-action aid additionally covers recordkeeping necessities that will in any other case apply below current swap laws. The CFTC made clear the place applies solely throughout the phrases outlined within the letter issued Might 13.
Regulators defined that the choice got here in response to repeated requests from DCMs and DCOs to checklist and clear occasion contracts. A number of operators had filed particular person requests in search of related aid, main the company to consolidate its method.
The divisions disclosed that they anticipate extra requests to comply with. A few of these requests are anticipated to ask for modifications to earlier no-action positions, accounting for modifications to DCM designation orders, new DCOs coming into the house, and different market developments.
By issuing a single blanket place, the commodities and derivatives regulator goals to scale back administrative burden on each regulators and market individuals. The construction removes the necessity for the company to subject repetitive particular person letters every time a brand new entity seeks the identical aid.
The brand new framework covers all entities that beforehand acquired no-action letters on occasion contract knowledge reporting. These prior beneficiaries stay coated without having to file once more.
Entities that wish to checklist or clear related contracts going ahead can request inclusion within the letter. If the divisions approve, the requester’s identify will get added to an appendix hooked up to the CFTC letter.
The CFTC said that the appendix method ensures constant remedy between new candidates and those who acquired earlier particular person letters. Regulators described the objective as streamlining the method for addressing future requests.
Prediction markets have drawn growing consideration from federal regulators over the previous two years. Platforms like Polymarket and Kalshi permit customers to commerce on the result of political, financial, and different real-world occasions, which have pushed regulators to make clear the place occasion contracts match below current derivatives legislation.
The no-action letter doesn’t change the underlying authorized standing of occasion contracts. It narrows the scope of reporting obligations the CFTC will actively implement whereas the broader regulatory framework continues to develop. Final month, CFTC Chairman Michael Selig informed lawmakers that the regulator makes use of Microsoft AI instruments to watch prediction markets.
Operators that fall outdoors the phrases of the letter will not be coated and can’t assume similar safety. The CFTC mentioned entities in that place have to file a direct request to be added to the appendix.
The letter positions the CFTC as the first federal regulator managing the compliance construction for prediction markets working in the USA, a minimum of for now. The letter arrives as dozens of states conflict with the CFTC in court docket over who holds regulatory authority throughout the prediction market sector.
