Key Takeaways
The CFTC’s Division of Market Oversight issued a blanket no-action letter on Might 13, 2026, masking all swap information 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 an identical reduction can request inclusion within the no-action letter’s appendix, with the CFTC signaling uniform therapy going ahead.
CFTC Points Blanket No-Motion Letter Reducing 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 advocate enforcement motion in opposition to designated contract markets, derivatives clearing organizations, or their individuals for failing to report occasion contract transaction information to swap information repositories.
The no-action reduction additionally covers recordkeeping necessities that might in any other case apply underneath present swap rules. 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 record and clear occasion contracts. A number of operators had filed particular person requests in search of related reduction, main the company to consolidate its strategy.
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 area, and different market developments.
By issuing a single blanket place, the commodities and derivatives regulator goals to cut 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 reduction.
The brand new framework covers all entities that beforehand obtained no-action letters on occasion contract information reporting. These prior beneficiaries stay lined with no need to file once more.
Entities that wish to record or clear related contracts going ahead can request inclusion within the letter. If the divisions approve, the requester’s title will get added to an appendix hooked up to the CFTC letter.
The CFTC said that the appendix strategy ensures constant therapy between new candidates and those who obtained earlier particular person letters. Regulators described the objective as streamlining the method for addressing future requests.
Prediction markets have drawn rising consideration from federal regulators over the previous two years. Platforms like Polymarket and Kalshi enable customers to commerce on the end result of political, financial, and different real-world occasions, which have pushed regulators to make clear the place occasion contracts match underneath present derivatives regulation.
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 advised lawmakers that the regulator makes use of Microsoft AI instruments to watch prediction markets.
Operators that fall exterior the phrases of the letter should not lined and can’t assume an identical 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 US, no less than for now. The letter arrives as dozens of states conflict with the CFTC in courtroom over who holds regulatory authority throughout the prediction market sector.
