Citadel Securities has told regulators that prediction market contracts tied to key performance indicators of listed companies should be classified as security-based swaps. In its view, those contracts should fall under the authority of the U.S. Securities and Exchange Commission rather than the Commodity Futures Trading Commission. The firm said keeping such products under CFTC oversight could split regulatory authority and fragment the market. It also called for changes to the current regulatory framework.
Citadel Securities said in a letter to regulators that prediction market contracts tied to key performance indicators of publicly listed companies should be classified as security-based swaps and regulated by the U.S. Securities and Exchange Commission, rather than the Commodity Futures Trading Commission.
Citadel Securities said continued CFTC oversight of those contracts could lead to a split in regulatory authority and market fragmentation, and called for adjustments to the current regulatory framework.
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