Canadian Regulators Try to Tamp Down Prediction Market Concerns

Canada is having a moment of issue about prediction markets, and local regulators are reading the riot act to extremely eager firms and investors.


- Canadian regulators are significantly alerting about prediction markets, stressing rigorous rules, enforcement dangers, and existing bans on short-term binary alternatives.
- Interest is growing amongst Canadian firms and users, affected by the growing and questionable expansion of prediction markets in the United States.
- While Canada currently allows only restricted, firmly controlled activity, rising attention, media protection, and enforcement actions suggest a more comprehensive regulative crackdown might be coming.


On Thursday, the Canadian Securities Administrators (CSA), an umbrella group for provincial securities regulators, and the Canadian Investment Regulatory Organization (CIRO), an industry self-regulator, issued a press release advising everybody of the constraints on forecast markets and occasion contracts in Canada.


"Anyone trading, or assisting in trading, in event contracts which are securities or derivatives, must follow relevant requirements under securities or derivatives legislation, such as registration or recognition requirements," the release states. "For example, in some CSA jurisdictions, Multilateral Instrument 91-102 Prohibition of Binary Options forbids anyone from marketing, offering, offering or otherwise trading a binary choice having a term to maturity of less than one month, with or to a person."


The regulators noted failure to adhere to regional guidelines "might result in enforcement action."


Canadian regulators issued a press release today reminding everyone of the country's prediction market-related restrictions.


"... to date, no prediction market has actually been acknowledged as an exchange or signed up as a dealer (or exempted from those requirements) by the CSA." pic.